Monetary Policy Unchanged

Singapore's central bank uses the exchange rate as its instrument of monetary policy, steering its nominal effective exchange rate (NEER), which is a trade-weighted measure of the currency's value, within an undisclosed band. The openness of Singapore's economy makes the exchange rate a more effective instrument than domestic interest rates, which most central banks choose to directly manipulate. The current stance of gradual appreciation is intended to cool inflationary pressures by lowering the price of imports and stifling aggregate demand.

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