Monetary policy for any country is very much important to keep up with the increasing and decreasing rates of inflation. Like every country has its own Central Bank that regulates the same. Now talking about Singapore it has been seen that the monetary policy present in the country is altogether different in nature. In other words, it has been seen to be a kind of ‘back-to-front’ when compared to the policies of the other countries.
In most of the countries, it has been seen that with an increase in the borrowing cost is nothing but a reason for the fact that the central bank is actually tightening the fiscal policies. On the other hand, when compared to the states or rather the cities in Asia it has been seen that the interest rates tend to rise when the central bank is actually loosening the fiscal policies.
In Singapore, the same kind of thing has been observed where the Monetary Authority of Singapore uses the exchange rate that is actually prevailing in the globe. In this case, the interest rates become irrelevant. The major reason for the same is the bi-annual reviews that are seen to occur in the months of April and October.