The International Monetary Fund and World Bank have said Lee, who is expected to take over as prime minister within the year, might face conflicts of interest from his various responsibilities.

However, the government's prudent fiscal policy will ensure that Lee will not face such a problem, his deputy chairman at the Monetary Authority of Singapore (MAS), Lim Hng Kiang, said in reply to queries in parliament.

"There has never been any need for MAS to finance any government deficit nor is such a need likely to arise in future," Lim said.

"MAS has full freedom to carry out its primary role of maintaining price stability."

Legal and insitutional safeguards as well as the accountability of the MAS will provide further protection, he added.

"While the MAS board sets the broad policy directions, it is the managing director and the management team who execute day-to-day operations according to these policies.

"In addition, MAS' long tradition of sound licensing and supervisory decisions, and its increasing transparency will continue to ensure that MAS carries out its responsibilities in a responsible manner."

The government will review the MAS Act to "further strengthen accountability and transparency", he added.

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