Monetary Authority of Singapore

The Monetary Authority of Singapore (MAS) is Singapore’s central bank and the country’s integrated financial regulatory authority. Established on 1 January 1971, it was created to consolidate responsibilities that had previously been distributed among several government departments and agencies. MAS acts as banker and financial agent to the Singapore Government, conducts monetary policy, manages Singapore’s official foreign-exchange reserves, issues the national currency, supervises financial institutions, and supports the stability and development of the financial system. Unlike central banks that primarily steer monetary conditions through short-term interest rates, MAS has traditionally conducted monetary policy mainly through the exchange rate. Singapore is a small, highly open economy in which imported goods and services have a substantial effect on domestic prices. MAS therefore manages the Singapore dollar against a trade-weighted basket of currencies within an undisclosed policy band. The slope, width and centre of that band are reviewed periodically, normally twice a year. The framework allows the currency to move with market conditions while giving the authority a mechanism to contain imported inflation and maintain medium-term price stability. MAS publishes a Monetary Policy Statement after each scheduled review, generally accompanied by a Macroeconomic Review explaining its assessment of economic conditions. The authority administers legislation covering banking, insurance, securities, capital markets, payments, financial infrastructure and other parts of the financial sector. Its supervisory responsibilities include licensing and oversight of banks, insurers, securities firms, payment-service providers and other regulated entities. MAS also works with domestic and international authorities on financial stability, anti-money-laundering controls, cyber resilience, consumer protection and cross-border regulation. MAS assumed responsibility for issuing Singapore’s banknotes and coins after the Board of Commissioners of Currency, Singapore was merged into it on 1 October 2002. It has the exclusive authority to issue currency, subject to the applicable statutory and governmental approval framework. The authority also supports the modernization of financial infrastructure. Initiatives associated with MAS include digital-bank licensing, payment-system connectivity, regulatory sandboxes, fintech collaboration, digital-finance research, tokenisation and international cooperation on faster cross-border payments. Its role expanded during periods of market stress. During the COVID-19 pandemic, MAS moved its scheduled policy review forward to 30 March 2020 and adopted an exceptionally accommodative exchange-rate stance by reducing the slope of the Singapore dollar policy band to zero and lowering the band. This was the first occasion since the global financial crisis that the two measures were taken together. MAS is accountable to Parliament through the minister responsible for the authority and operates under the purview of the Prime Minister’s Office. The institution is therefore a government authority rather than a privately owned or listed financial company. Beyond domestic regulation, it promotes Singapore as an international financial centre and convenes public- and private-sector initiatives involving fintech, sustainable finance, financial innovation and regional payment connectivity.

MAS was established on 1 January 1971 through legislation intended to create a single authority for Singapore’s monetary and financial functions. Before its creation, responsibilities such as currency, banking oversight and financial administration were handled by separate government departments and agencies. Its initial institutional purpose was to serve as banker to, and financial agent of, the Singapore Government while regulating banking and finance. The authority’s monetary-policy model developed around the needs of a small and open trading economy. From 1981, MAS made management of the Singapore dollar exchange rate its principal monetary-policy instrument. Rather than targeting a short-term interest rate or relying primarily on a formal inflation target, it manages the nominal effective exchange rate against a trade-weighted basket of currencies. The currency is permitted to fluctuate within a policy band, with the band’s parameters reviewed periodically. This framework is designed to influence import prices and broader domestic price conditions while allowing some flexibility for economic adjustment. Currency administration remained institutionally separate for several decades. The Board of Commissioners of Currency, Singapore, which had been established in 1967 and was responsible for issuing the city-state’s currency, was merged into MAS on 1 October 2002. MAS consequently became the authority with exclusive responsibility for issuing Singapore’s banknotes and coins. Over time, MAS developed into an integrated regulator covering much of Singapore’s financial system. Its remit includes banking, insurance, securities, capital markets and payment services, alongside financial-stability work and the administration of relevant legislation. It also manages Singapore’s official foreign-exchange reserves and acts as an important public-sector counterparty and policy institution in the country’s development as a global financial centre. During the COVID-19 pandemic, MAS responded to the abrupt economic and financial disruption by moving its scheduled policy review to 30 March 2020. It set the slope of the exchange-rate policy band to zero and lowered the band, an unusually accommodative combination that had not been used since the 2008 financial crisis. In subsequent years, the authority continued to combine conventional supervision with initiatives addressing digital finance, payment interoperability, cyber security, sustainable finance and financial innovation. MAS has sponsored or helped establish platforms for international fintech cooperation. The ASEAN Financial Innovation Network was created in 2018 by MAS, the ASEAN Bankers Association and the International Finance Corporation; its APIX platform provides a fintech marketplace and regulatory-sandbox environment. The Asian Institute of Digital Finance was established in 2021 through a collaboration among MAS, Singapore’s National Research Foundation and the National University of Singapore. MAS also supports the Singapore FinTech Festival and related international policy dialogues. More recently, its regional agenda has included Project Nexus, a multilateral effort to connect domestic instant-payment systems, and financing initiatives intended to mobilize private and public capital for Asia’s energy transition and climate resilience. Institutionally, MAS is accountable to Singapore’s Parliament through the minister responsible for it and operates under the Prime Minister’s Office. It is therefore a statutory government authority, not a listed corporation. Its continuing functions combine central banking, financial supervision, currency administration, reserve management and the development of Singapore’s financial ecosystem.

• 2024

  MAS joins Project Nexus as a founding member

  [1]Monetary Authority of Singaporeen.wikipedia.org

  MAS signed a multilateral agreement intended to support interoperability among participating domestic fast-payment systems.

• 2021

  Asian Institute of Digital Finance is established

  [1]Monetary Authority of Singaporeen.wikipedia.org

  MAS joined the National Research Foundation and National University of Singapore in establishing AIDF for digital-finance research, education and entrepreneurship.

• 2020

  COVID-19 monetary easing

  [1]Monetary Authority of Singaporeen.wikipedia.org

  MAS moved its policy review forward and set the policy-band slope to zero while lowering the band.

• 2018

  ASEAN Financial Innovation Network and APIX are launched

  [1]Monetary Authority of Singaporeen.wikipedia.org

  MAS helped establish AFIN and its APIX platform to connect financial institutions, fintech companies and regulators.

• 2002

  Currency authority is merged into MAS

  [1]Monetary Authority of Singaporeen.wikipedia.org

  The Board of Commissioners of Currency, Singapore merged into MAS on 1 October, bringing currency issuance under the central bank.

• 1981

  Exchange-rate policy becomes the principal monetary-policy framework

  [1]Monetary Authority of Singaporeen.wikipedia.org

  MAS began conducting monetary policy mainly through management of the Singapore dollar exchange rate.

• 1971

  MAS begins operations

  [1]Monetary Authority of Singaporeen.wikipedia.org

  The Monetary Authority of Singapore was founded on 1 January to regulate banking and finance and act as banker and financial agent to the government.

• 1967

  Board of Commissioners of Currency, Singapore is established

  [1]Monetary Authority of Singaporeen.wikipedia.org

  A separate statutory body was created to issue Singapore’s currency, a function later transferred to MAS.

Singapore’s central institution for monetary stability, financial regulation and international financial-sector development.

• Monetary policy · 1981

  Singapore dollar monetary-policy framework

  MAS manages the Singapore dollar’s nominal effective exchange rate against a trade-weighted basket of currencies within a policy band. The framework is intended to maintain medium-term price stability in a highly open economy where exchange-rate movements strongly affect import prices and domestic inflation. MAS reviews the band periodically and communicates its assessment through Monetary Policy Statements and related macroeconomic analysis.

• Currency · 2002

  Currency issuance

  Following the 2002 merger with the Board of Commissioners of Currency, Singapore, MAS became responsible for issuing Singapore’s banknotes and coins. It determines denominations and designs within the applicable approval framework, and the currency it issues serves as legal tender in Singapore.

• Financial regulation · 2020

  Digital-bank licensing

  MAS’s digital-bank licensing framework permits qualifying operators to provide banking services under either digital full-bank or digital wholesale-bank licences. The framework is intended to encourage innovation and competition while applying prudential, conduct and technology-risk requirements to new entrants.

• Fintech infrastructure · 2018

  APIX

  APIX is a global fintech marketplace and regulatory-sandbox platform associated with the ASEAN Financial Innovation Network. It facilitates collaboration among financial institutions, technology providers and regulators, allowing firms to explore technology applications and develop solutions across markets.

• Payments · 2024

  Project Nexus

  Project Nexus is a multilateral initiative designed to interlink domestic fast-payment systems so that participating countries can support more efficient retail cross-border payments. MAS is one of its founding central-bank participants.

• 2023Financing Asia’s Transition Partnership

  Asia · Southeast Asia

  FAST-P is an MAS-backed public-private partnership intended to mobilize and de-risk financing for regional climate-transition projects, including renewable energy, electric mobility and water or waste-management infrastructure.

  Outcome. Developed as a regional sustainable-finance platform with a stated target of mobilizing substantial blended capital.

  Source
• 2018ASEAN Financial Innovation Network

  ASEAN · International

  MAS helped create AFIN with the ASEAN Bankers Association and IFC to support cross-border financial innovation and practical cooperation between banks, fintech firms and regulators.

  Outcome. Created APIX as a fintech marketplace and regulatory-sandbox platform.

  Source
• 2016Singapore FinTech Festival

  Singapore · International

  MAS organizes the annual Singapore FinTech Festival with industry partners to bring together regulators, financial institutions, technology companies, investors and researchers. The event serves as a platform for product demonstrations, policy discussion, investment and international fintech networking.

  Outcome. Established as a recurring international fintech gathering.

  Source

• 2024

  Stronger identity verification for digital tokensOther

  Background

  Online scams and account-takeover risks created a need for stronger controls when customers activate digital banking tokens.

  Action taken

  MAS and the Association of Banks in Singapore announced progressive use of SingPass face verification for relevant setups.

  Aftermath

  The measure was intended to improve consumer protection and reduce fraud exposure.

  Source

• 2020

  Emergency exchange-rate easing during the pandemicStrategy

  Background

  The COVID-19 shock created severe uncertainty and threatened economic activity and financial conditions.

  Action taken

  MAS advanced its policy review, reduced the slope of the Singapore dollar policy band to zero and lowered the band.

  Aftermath

  The decision represented the authority’s first combined use of these two exchange-rate measures since the 2008 financial crisis.

  Source

• 2020

  Approval of digital-bank licencesProduct launch

  Background

  MAS sought to expand competition and innovation in Singapore’s banking sector while maintaining licensing and prudential safeguards.

  Action taken

  It approved four digital-bank licences involving the Grab-Singtel consortium, Sea Group, Ant Group and the Greenland Financial consortium.

  Aftermath

  Two applicants received digital full-bank licences and two received digital wholesale-bank licences.

  Source

1. 1Monetary Authority of Singaporeen.wikipedia.org
2. 2Monetary Authority of Singapore official websitemas.gov.sg