case study (MAS)

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Case Study Exchange Rate Policy at Monetary Authority Of Singapore : 

Case Study Exchange Rate Policy at Monetary Authority Of Singapore Presented By: Seema Razzaque Mansoor Hyder Ume Salma Saifullah Salma Naz Umair Ahmed Syed

Introduction & Case Issue : : 

2 Introduction & Case Issue : Dr. Khor Hoe Ee ( Assistant Managing Director MAS) To formulate strategy for Singapore Economy regarding, Consistent economic growth Price Stability supporting Singapore's role as globally financial center Asian Crises and its impacts on neighboring countries depreciation in currency and other assets.

Monetary Authority of Singapore (MAS) : 

3 Monetary Authority of Singapore (MAS) Established in 1971 after collapse of Bretton Wood System It’s a regulatory authority of Singapore It serves as central Bank in Singapore. Aims Of MAS Sustainable Growth Price Stability Employment Globally Competitive Financial Center.

Monetary Authority of Singapore (MAS) : 

4 Monetary Authority of Singapore (MAS) Functions of MAS Monetary and Exchange Rate Policy Financial Sector supervision Banker to Financial Institution. Financial Agent of Government Financial Sector Development.

Policy Formulation : 

5 Policy Formulation Increase of Decrease domestic interest rate Change in Money supply To maintain open capital account ( free & continuous conversion of Currency). Unholy Trinity MAS Used Exchange rate as policy tool and developed Synthetic Currency based on trade weighted basket of currencies

Monetary objectives : 

6 Monetary objectives Inflation should not exceed 2% unemployment should remain in line with the non- accelerating inflation rate of unemployment Wages should keep pace with productivity improvement Subject to these condition, maximize economic growth while retaining the flexibility to absorb possible external shock

Current Scenario : 

7 Current Scenario Singapore is currently facing two problems Wage Inflation Goods Inflation GAP MODELS It suggests that previous growth of Singapore has remained due to budget surplus . If Singapore devalue its Currency it will increase Net exports, money Supply, income but it also results in rise in domestic prices and import prices

Suggestions : 

8 Suggestions By using budget surplus we can purchase of foreign reserves, which will ultimately increase the value of Singapore currency. Employer Provident Fund should be maintained which will help in controlling wage inflation