Explainer: Singapore's MAS Uses Unique Exchange Rate-Focused Monetary Policy

Singapore's central bank manages monetary policy by adjusting the exchange rate of its currency rather than domestic interest rates. The Monetary Authority of Singapore (MAS) sets a policy band for the Singapore dollar's trade-weighted exchange rate (S$NEER) to control inflation in the highly trade-reliant economy. The S$NEER is allowed to fluctuate within an undisclosed band; the MAS intervenes only if it moves outside this range. The central bank adjusts three parameters—the slope, midpoint, and width of the band—typically during scheduled reviews. Since 2024, the MAS has issued policy statements quarterly, moving from a semi-annual schedule, to provide more timely economic assessments.