Modest and gradual appreciation
Definition. Modest and gradual appreciation describes the stance under which the Monetary Authority of Singapore guides the Singapore dollar to strengthen slowly against its trade-weighted basket over time. This policy aims to keep imported inflation in check while avoiding sharp moves that would harm export competitiveness.
Because Singapore imports much of what it consumes, a gradually stronger currency lowers the price of imports and so restrains inflation, while the modest pace protects exporters from a sudden loss of price competitiveness.
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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