Singapore Dollar Nominal Effective Exchange Rate
S$NEER is the exchange rate between the Singdollar and a basket of currencies of the country’s major trading partners.
Why manage S$NEER?
The Singapore economy is small and open, where gross export and import of goods are more than 300% of GDP. Almost 40 cents of every dollar spent domestically go into imports. This means exchange rate has a much higher influence on inflation and price stability.
What is done with S$NEER?
The Singdollar is allowed to appreciate and depreciate against this basket of currencies, which it does not disclose, within a band. If the threshold is crossed, the MAS will intervene.
How is the S$NEER adjusted?
- In 2008, the MAS flattened the slope of the S$NEER to prevent appreciation of the Singdollar
- In 2009, they economic recession resulted in a sharp fall of inflation, and the band was moved downwards
- In Apr 2010, the band was shifted to a positive slope, and upwards, following the recovery of the Singapore economy