Singapore: Selected Issues

Publication Date: November 14, 2013
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Summary: This Selected Issues Paper discusses some observations on Singapore’s monetary policy framework. Singapore’s monetary policy uses the nominal effective exchange rate (NEER) as the instrument in a basket-band-crawl framework. The paper finds that under some conditions an exchange rate-based monetary policy may not be detrimental to external competitiveness. A key parameter is the weight of imports in the consumer basket or production function. Tightening monetary policy through a nominal appreciation helps to dampen imported cost pressures. In addition, nominal appreciation can reduce domestic sources of inflation by lowering demand for local factors of production.
Series: Country Report No. 13/327
Subject(s): Labor markets | Labor productivity | Education | Monetary policy | Real effective exchange rates | Selected issues | Singapore

Publication Date: November 14, 2013
ISBN/ISSN: 9781475520743/1934-7685 Format: Paper
Stock No: 1SGPEA2013003 Pages: 11
US$18.00 (Academic Rate:
US$18.00 )
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