Monetary Policy

Monetary policy in Singapore is centred on the exchange rate. In the small and open Singapore economy, the exchange rate is the more effective tool for maintaining price stability.

The MAS' primary goal is to ensure price stability and maintain confidence in the Singapore dollar (S$).

Learn more about Singapore's monetary policy.

How the Sing Dollar is Managed

MAS manages the Sing Dollar exchange rate against a trade-weighted basket of currencies of Singapore's major trading partners and competitors.

The composition of this basket is reviewed and revised periodically to take into account changes in Singapore's trade patterns.

This trade-weighted exchange rate is maintained broadly within an undisclosed target band. It is allowed to appreciate or depreciate depending on factors such as the level of world inflation and domestic price pressures.

MAS may also intervene in the foreign exchange market to prevent the S$ exchange rate from fluctuating too much.

Policy Reviews

Monetary policy is reviewed every 6 months to ensure that it is consistent with economic and market conditions. This ensures low inflation and economic growth over the medium term.

For an assessment of Singapore's economic and inflationary conditions and outlook, see MAS' semi-annual Monetary Policy Statement (MPS).

Money Market Operations

MAS' monetary policy focuses on controlling the exchange rate, rather than interest rates.

As such, MAS conducts money market operations mainly to ensure that the banking system has enough liquidity to meet banks' demand for reserve and settlement balances.

For a look at key aspects of MAS' monetary policy operations, see the monograph on Monetary Policy Operations in Singapore (609.7 KB).