Singapore's prime minister said on Sunday that the government was keeping an eye on turbulent markets because the trade-dependent city-state's economy could be hit by worsening consumer confidence in the United States.
"Recently, global financial markets have been turbulent. Singapore's stock market has declined quite a bit... We are monitoring the market closely," Prime Minister Lee Hsien Loong said in a speech on state television to mark the city-state's national day.
Uncertainty over the fallout of US subprime mortgages and investor fears of tighter credit supply have roiled financial markets around the world in the past two weeks.
Lee said he was not sure about the effects of the decline in stock markets. "If this decline has weakened the American consumers then the economies in Asia and Singapore will be affected. But I believe that the economic foundations for Asia and Singapore remain strong.
This is not a financial crisis in Asia, this is a crisis in the advanced countries which has affected us," he said. Asian stock market fell sharply on Friday with Singapore shares diving as much as 6 percent in their sharpest one-day fall since September 12, 2001.