Exchange Rate Pass-Through Over the Business Cycle in Singapore

Download or read book Exchange Rate Pass-Through Over the Business Cycle in Singapore written by Mr.Sam Ouliaris and published by International Monetary Fund. This book was released on 2011-06-01 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates exchange rate pass-through in Singapore using band-pass spectral regression techniques, allowing for asymmetric effects over the business cycle. First stage pass-through is estimated to be complete and relatively quick, confirming existing views that the exchange rate provides an effective tool to moderate imported inflation in Singapore. Asymmetric pass-through effects over the business cycle are also detected, with importers passing on a smaller share of exchange rate movements during boom periods as compared to recessions. This result suggest that Singapore’s exchange rate policy could afford to "lean against the wind," especially during cyclical expansions.