This revision takes into account the recent developments in global commodity prices. 6  BIS Review 91/2009  Monetary policy In October last year, in light of the weak economic environment and easing inflationary pressures, MAS shifted to a 0% appreciation of the $ policy band. This was followed by a re-centring of the policy band to the prevailing level of the $ in April 2009, while keeping the 0% appreciation path. At this juncture, notwithstanding the sharp rebound in the economy in Q2 2009, growth remains below trend and inflationary pressures continue to be muted. We assess that the current policy stance remains appropriate to support the economic recovery and ensure medium-term price stability, which in turn underpins confidence in the Singapore dollar. Our next monetary policy review will take place as scheduled in October. Conclusion Going forward, it will be important for central banks and regulators around the world to remain vigilant and to continue addressing financial system risks as the markets remain fragile and uncertainty remains. Singapore is not insulated from pressures in other parts of the world. We need to understand the changes and anticipate how they would affect us in order to take the right actions. MAS will continue to build on our key pillars of having sound financial institutions, ensuring well functioning markets and maintaining confidence of investors. Building on such strong fundamentals and adapting to new challenges, we can ensure we emerge stronger. Thank you. BIS Review 91/2009  7
18 It is possible that the interval between the reviews could also be slightly longer, as monetary policy objectives probably have quite a long “durability” and perhaps do not need to be reviewed quite so often. Such regular reviews would probably not lead to substantial changes over time, which has not been the case in Canada either. But now and then, the conclusion may be that a change to the monetary policy objective would be preferable, which would of course be entirely appropriate. The important thing is that the remit is formulated via objective and scientific examination and scrutiny and not determined by short-term political motives or subjective opinion moulding in the media. Before any system of regular reviews is introduced, legal aspects must of course be considered. As far as Sweden is concerned, this means, for example, that both the remit and its terms must be compatible with EU law, which states, among other things, that the central bank shall maintain price stability. Although this puts restrictions on the possible remits of central banks, there are nevertheless some degrees of freedom as regards the exact policy formulation. That the central bank should aim at maintaining price stability defined in one way or another is of course only natural. The terms of the reviews must also consider that the central bank shall perform its remit without influence from the Member State’s parliament, government or any other body.