Monetary policy was tightened five times within the space of a year - between October 2021 and October 2022 – even in the face of increasing growth uncertainties. The trade-weighted exchange rate of the Singapore Dollar has appreciated by 8.3% since the beginning of October 2021, helping to dampen imported inflation and domestic cost pressures. But the fight against inflation is not over and the monetary policy stance remains tight relative to the business cycle. The most recent monetary policy decision to maintain the prevailing rate of appreciation of the trade-weighted Singapore Dollar means that the exchange rate will continue to exert a dampening effect on inflation. The continuous tightening of monetary policy imparted by the upward slope of the exchange rate policy band is unique to Singapore's exchange-rate centred monetary policy framework. In countries whose monetary policy is centered on interest rates, the policy rate is set at a specific value and will not tighten further unless the central bank makes a fresh policy decision. The impact of this appreciating path as well as our previous policy moves will therefore continue to flow through the economy and dampen inflation. About one-third of the cumulative restraining effects of the previous five moves remains in the pipeline. MAS is not switching from "inflation-fighting mode" to "growth-supporting mode". We are closely monitoring the evolving growth-inflation dynamics and remain vigilant to risks on either side. We stand ready to adjust monetary policy as needed, especially if inflation momentum were to re-accelerate.
This was a clear break with the earlier arrangement where the management was closer to that of a conventional company with a managing director and a board that exercised control and took the overriding decisions. I should like to conclude with some remarks on the challenges this change involved. As regards monetary policy, it was not all that difficult. In the light of experience from the German, British and American central banks, for example, we had drawn up proposals for working procedures which we have largely adhered to. Our internal process is very open and the staff are deeply involved. The minutes of the Executive Board's monetary policy discussions are published, which dispels any sense of mystery. At the same time, a better foundation is hopefully provided for a discussion of monetary policy in society in general. The matter of internal control has been trickier. One alternative would be to treat the Executive Board as a board of directors; that, however, would have meant working with as many as 18 chief executives in the form of the heads of department. Another possibility would be to see ourselves as chief executives but that, too, has its pros and cons; few organisations have six chief executives, presumably for very good reasons. Perhaps the closest parallel is the board of a group with a number of subsidiaries. In practice we have adopted a variety of approaches.