{
  "title": "Exchange Rate Pass-Through to Inflation in Singapore: Singapore",
  "publication": "Selected Issues Papers, August 13, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2024/08/23/exchange-rate-pass-through-to-inflation-in-singapore-singapore-553475",
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  "summary": "Singapore has addressed high inflation over the past years amid a tight labor market through several rounds of tightening of the exchange rate-based monetary policy.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- Singapore has addressed high inflation over the past years amid a tight labor market through several rounds of tightening of the exchange rate-based monetary policy.\n- The paper estimates exchange rate pass-through to inflation in Singapore and finds a strong exchange rate pass-through to inflation after accounting for the potential endogeneity of changes in the exchange rate.\n- Labor market tightness dampens exchange rate pass-through and therefore could weaken monetary policy transmission.\n- Overall conclusion: monetary policy should be more vigilant under a tight labor market condition."
    },
    {
      "heading": "Role of labor market conditions",
      "content": "- Labor market tightness reduces the effectiveness of exchange rate movements in lowering inflation by dampening exchange rate pass-through.\n- Tight labor market conditions can therefore weaken the transmission of exchange rate–based monetary policy to inflation outcomes."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Monetary policy should be more vigilant under tight labor market conditions.\n- Drawn implications focus on taming inflation under tight labor market conditions (policy guidance emphasizes greater vigilance given dampened pass-through)."
    },
    {
      "heading": "Publication and metadata",
      "content": "- Author: Kodjovi M. Eklou\n- Date: August 13, 2024\n- Series: Selected Issues Paper No. 2024/039\n- Issue: 039\n- Volume: 2024\n- Pages: 24\n- DOI: https://doi.org/10.5089/9798400283796.018\n- ISBN: 9798400283796\n- ISSN: 2958-7875\n- Subjects: Consumer price indexes, Exchange rate pass-through, Exchange rates, Foreign exchange, Inflation, Labor, Labor markets, Prices\n- Keywords: $NEER appreciation shock, Consumer price indexes, Exchange rate pass-through, exchange rate pass-through to inflation, Exchange rates, Global, Inflation, inflation development, labor market conditions, labor market tightness, Labor markets, Monetary Policy, pass-through to inflation, services inflation\n\nSource: Kodjovi M. Eklou, \"Exchange Rate Pass-Through to Inflation in Singapore: Singapore\", Selected Issues Papers 2024/039.\n\n---\n\n Content in this bundle\n\n- Exchange Rate Pass-Through to Inflation in Singapore\n  - Exchange Rate Pass-Through to Inflation in Singapore (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Exchange Rate Pass-Through to Inflation in Singapore (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2024/08/23/exchange-rate-pass-through-to-inflation-in-singapore-singapore-553475"
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    "Authors: Kodjovi M. Eklou",
    "Published: August 13, 2024",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798400283796.018",
    "Singapore has addressed high inflation over the past years amid a tight labor market through several rounds of tightening of the exchange rate-based monetary policy.",
    "The paper estimates exchange rate pass-through to inflation in Singapore and finds a strong exchange rate pass-through to inflation after accounting for the potential endogeneity of changes in the exchange rate.",
    "Labor market tightness dampens exchange rate pass-through and therefore could weaken monetary policy transmission.",
    "Overall conclusion: monetary policy should be more vigilant under a tight labor market condition.",
    "Labor market tightness reduces the effectiveness of exchange rate movements in lowering inflation by dampening exchange rate pass-through.",
    "Tight labor market conditions can therefore weaken the transmission of exchange rate–based monetary policy to inflation outcomes.",
    "Monetary policy should be more vigilant under tight labor market conditions.",
    "Drawn implications focus on taming inflation under tight labor market conditions (policy guidance emphasizes greater vigilance given dampened pass-through).",
    "Author: Kodjovi M. Eklou",
    "Date: August 13, 2024",
    "Series: Selected Issues Paper No. 2024/039",
    "Issue: 039",
    "Volume: 2024",
    "Pages: 24",
    "DOI: https://doi.org/10.5089/9798400283796.018",
    "ISBN: 9798400283796",
    "ISSN: 2958-7875",
    "Subjects: Consumer price indexes, Exchange rate pass-through, Exchange rates, Foreign exchange, Inflation, Labor, Labor markets, Prices",
    "Keywords: $NEER appreciation shock, Consumer price indexes, Exchange rate pass-through, exchange rate pass-through to inflation, Exchange rates, Global, Inflation, inflation development, labor market conditions, labor market tightness, Labor markets, Monetary Policy, pass-through to inflation, services inflation",
    "**Exchange Rate Pass-Through to Inflation in Singapore**"
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