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     Singapore is a small and open economy, highly dependent on trade. Singapore is committed to keeping our markets open, promoting competition and supporting businesses and workers through the crisis. With changesintechnology,demandpatternsandsupplyconditionsinrecentyears,Singapore has focused on accelerating our transformation into an innovation-led economy, powered by technology, and ready to face the challenges of the future. Singapore aims to position itself as a Global-Asian o de of technology, innovation and enterprise, that is sustainable, resilient and inclusive.

During the period under review, Singapore's trade policies focused on four key priorities:

(i)            navigating the post-pandemic economic landscape

(ii)           supporting and contributing to the global multilateral trading system

(iii)          enhancing regional and bilateral trade cooperation; and

(iv) promoting an inclusive and sustainable trade policy.


Macroeconomic Policies                                                        

During the period, Singapore's macro economic policies were adjusted in view of prevailing economic conditions. Specifically, for 2020, in response to the COVID-19 pandemic, Singapore's monetary, financial, fiscal and regulatory policies were eased to provide timely and targeted support.     Singapore's fiscal policy was expansionary, focusing on targeted measures for macroeconomic stability, economic growth, and redistribution to promote social equity, fiscal sustainability and microeconomic efficiency. In 2020, fiscal policy was the most expansionary on record for Singapore and played a key role in mitigating the impact of the recession. Notably, in line with the pace and breadth of economic recovery, policy focus shifted from broad emergency assistance to targeted fiscal policies and financial relief to support post-pandemic priorities.

 Singapore's exchange rate centered monetary policy seeks to ensure price stability over themediumtermasabasisforsustainableeconomicgrowth.Monetarypolicysettingsbetween2016-20 were characterized by four distinct phases, in line with the changing macroeconomic environment. In 2016-17, the MAS kept monetary policy accommodative, via a zero per cent rate of appreciation in the Singapore dollar nominal effective exchange rate (S$NEER) policy band in light of the subdued outlook for growth and inflation. By early 2018, prospects for core inflation had turned around, and upward pressures on inflation were building with the emergence of a positive output gap. In turn, the MAS tightened monetary policy, increasing the rate of appreciation of the S$NEER policy band twice during the year. In October 2019, the MAS shifted to an eased monetary policy stance, through slight reduction in the slope of the S$NEER policy band. This was in view of the effects of US-China trade tensions on global growth, and consequently domestic core inflation.

In Q12020, the S$NEER depreciated with in the then-prevailing policy band to a level slightly below the mid-point. Subsequently in April 2020, the MAS set the S$NEER policy band on a zero per cent appreciation path to prevent sharper drops in output, wages and prices. This accommodative monetary policy stance complemented the strongly expansionary fiscal policy. In keeping the S$NEER on a stable path, it also helped to underpin confidence in the Singapore economy during the crisis. At the same time, the MAS provided increased liquidity to the domestic financial system through its money market operations. With core inflation expected to remain well-below its long-termaverage,theMASwillcontinuetomaintainanaccommodativemonetarypolicystancefor sometime.


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