Singapore: Selected Issues

November 14, 2013

Preview Citation

Format: Chicago

Singapore: Selected Issues, (USA: International Monetary Fund, 2013) accessed December 25, 2024

Summary

This Selected Issues Paper discusses some observations on Singapore’s monetary policy framework. Singapore’s monetary policy uses the nominal effective exchange rate (NEER) as the instrument in a basket-band-crawl framework. The paper finds that under some conditions an exchange rate-based monetary policy may not be detrimental to external competitiveness. A key parameter is the weight of imports in the consumer basket or production function. Tightening monetary policy through a nominal appreciation helps to dampen imported cost pressures. In addition, nominal appreciation can reduce domestic sources of inflation by lowering demand for local factors of production.

Subject: Foreign exchange, Inflation, Labor, Labor force, Prices, Production, Productivity, Real effective exchange rates, Wages

Keywords: CR, Export-led growth model, Global, Inflation, Inflation differential, ISCR, Labor force, Monetary policy, Monetary policy framework, NEER, Productivity, Productivity gain, Reaction function, Real effective exchange rates, Resident labor force, Singapore, Wages

Publication Details

Pages:

11
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2013/327
Stock No:

1SGPEA2013003
ISBN:

9781475520743
ISSN:

1934-7685

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