Singapore prospects remain bright

AMID a rising interest rate environment, the Monetary Authority of Singapore (MAS) has tightened its monetary policy setting recently by re-centring the Singapore dollar nominal effective exchange rate (S$NEER) band to the predominant level and increasing the appreciation rate of the policy band. However, there is no change on the width of the policy band.

The MAS manages its monetary policy through exchange rate settings, rather than interest rates, because Singapore is a small and open economy, where gross exports and imports of goods and services are more than 300% of gross domestic product (GDP) and almost 40 Singapore cents (RM1.25) of every S$1 (RM3.12) spent domestically is on imports.