In Singapore, the key monetary policy tool is its exchange rate policy - not interest rates
The Monetary Authority of Singapore (MAS) is the country's central bank.
Note that the MAS's key monetary policy tool is its exchange rate policy. It adjusts the exchange rate of its dollar (SGD) instead of changing domestic interest rates like most other economies.
It manages the SGD exchange rate against a basket of currencies of Singapore's major trading partners.
S$NEER is a combined index made up of bilateral exchange rates between Singapore and its major trading partners
MAS permits the S$NEER to move up and down within the policy band (exact levels are not disclosed). If it goes out of this band, the MAS steps in by buying or selling Singapore dollars.
The policy band has three parameters that the MAS can adjust:
The MAS made an unexpected announcement in October 2023 that it was switching to quarterly meetings to assess monetary settings from 2024. It had been meeting only twice a year, in April and October (but could, and did from time to time, meet more often, if conditions demanded an immediate change in settings, such as in 2022 when high inflation triggered two off-cycle moves).