MAS monetary policy
Definition. MAS monetary policy is the conduct of monetary policy by the Monetary Authority of Singapore through management of the exchange rate rather than interest rates or the money supply. It centres the Singapore dollar against a trade-weighted basket of currencies within an undisclosed policy band.
The exchange rate is chosen because Singapore is a small and very open economy in which imports and exports are large relative to output, making the exchange rate a more effective tool than interest rates for controlling imported inflation.
This term belongs to Singapore's Monetary Policy (MAS) in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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