ANNUAL REPORT 2002 / 2003

Economic Developments and Monetary Policy

Neutral Monetary Policy Stance in 2002

Due to subdued inflationary conditions and the uncertain economic outlook, MAS has maintained a neutral policy stance since the beginning of 2002 with a 0% appreciation path for the Singapore Dollar Nominal Effective Exchange Rate (S$NEER). (See Chart 17a.) This was centred on the level of the S$NEER prevailing at the start of the year. This policy stance was maintained after reviews in July 2002 and January 2003. Overall monetary conditions in Singapore remained easy throughout the year, with domestic interest rates trending lower in the second half of 2002, reflecting the soft global interest rate environment and slack liquidity conditions in the money market. (See Chart 17b.)




The Global Economy: Still Waiting for Recovery International Financial Markets: Uncertainty Takes its Toll The Singapore Economy: Roller Coaster Ride
Neutral Monetary Policy Stance in 2002 Increasing the Transparency of Monetary Policy Framework In-depth Economic Research and Analysis

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