Monetary Policy Framework

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. Learn more about our unique monetary policy framework.

What is MAS’ role and objective in monetary policy?

The Monetary Authority of Singapore (MAS) is Singapore’s central bank and conducts monetary policy to maintain price stability conducive to sustained growth of the economy. This objective is enshrined in the MAS Act.

How does MAS achieve price stability?

In a small and open economy such as Singapore, where gross exports and imports of goods and services are more than 300 percent of GDP and domestic expenditure has a high import content, the exchange rate has a much stronger influence on inflation than the interest rate. Accordingly, MAS’ monetary policy framework is centred on managing the Singapore dollar against a trade-weighted basket of currencies. This is also known as the Singapore dollar nominal effective exchange rate (S$NEER).