Reserve Management and Motivations for FX Interventions

5 Pages Posted: 13 Dec 2019

See all articles by Monetary Authority of Singapore

Monetary Authority of Singapore

Government of the Republic of Singapore - Monetary Authority of Singapore (MAS)

Date Written: October 31, 2019

Abstract

Unlike most central banks which target interest rates, Singapore runs an exchange rate-centred monetary policy framework, in which the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) is the intermediate target of monetary policy. The S$NEER fluctuates within a policy band that is calibrated to ensure medium-term price stability. The Monetary Authority of Singapore (MAS) undertakes foreign exchange intervention operations to ensure that the S$NEER stays within the policy band. In the process of monetary policy implementation, the central bank accumulates or expends official foreign reserves, leading to changes in the size of its balance sheet. As with other central banks, the MAS’ main objective of holding reserves is to meet balance of payment needs, which underpin the effective implementation of monetary policy.

Full Publication: Reserve Management and FX Intervention

Keywords: exchange rate, NEER, FX intervention, reserve management, Singapore

JEL Classification: E52, E58, E61, G32

Suggested Citation

, Monetary Authority Singapore, Reserve Management and Motivations for FX Interventions (October 31, 2019). BIS Paper No. 104v, Available at SSRN: https://ssrn.com/abstract=3501178

Monetary Authority Singapore (Contact Author)

Government of the Republic of Singapore - Monetary Authority of Singapore (MAS)

10 Shenton Way #18-00
MAS Building
Singapore, 079117
Singapore

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
17
Abstract Views
185
PlumX Metrics