More again on the stunning announcement from the Monetary Authority of Singapore earlier today:

Via MNI, comment from the MAS in comment to this morning’s announcement:

  • “Domestic interest rates are expected to rise in tandem with US interest rates, regardless of the January policy announcement.
  • The actual profile of the adjustment will be market-driven.
  • There could be some short-term volatility in the financial markets, reflecting uncertainties over the pace of interest rate normalisation and developments in the foreign exchange market.
  • Our next monetary policy review will be as scheduled in April, when we will reassess the prospects for growth and inflation, taking into account the latest external and domestic economic indicators.
  • Barring significant shocks, the inflation and growth forecasts for 2015 would likely be reaffirmed.”

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Added …

I’ve just been reminded on Twitter that “..Its all about the NEER band Eammon” (by @terrencewalsh1)

Too true, so here’s an update:

  • The Monetary Authority of Singapore uses the exchange rate, instead of interest rates, as its primary monetary policy instrument
  • Its sets a Singapore dollar nominal effective exchange rate (NEER) policy band, with slope, width and mid-point. the slope allows the SGD to appreciate or depreciate over time