NewsMV
A surprise monetary tightening from the Monetary Authority of Singapore has put the Singapore dollar (SGD) in focus, with rising oil prices named as the catalyst behind renewed inflation pressure.
The MAS takes a different approach from most central banks: it targets medium-term price stability by managing the Singapore dollar's exchange rate against a trade-weighted basket of currencies rather than setting a benchmark interest rate.
The next concrete milestone is the MAS's formal statement on the scope of the band adjustment and any updated inflation outlook accompanying it.
The exchange rate mechanism Most central banks reach for an interest rate when inflation pressure builds. The MAS reaches for the exchange rate.
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