Who is the Monetary Authority of Singapore?
Most people know the Monetary Authority of Singapore, or MAS in short, as the central bank of Singapore. However, not everyone really knows what MAS actually do, and more importantly, how its decisions can have an impact on our lives in Singapore.
Rather than write a PHD long thesis of the functions and responsibilities of a central bank, we will simplified the understanding and simply list down three main roles which which MAS plays.
“ Print Money”
Having merged with the Board of Commissioners of Currency on 1 October 2002, MAS has sole monopoly when it comes to decisions relating to the issuing of Singapore’s currency. Banknotes and coins issued by MAS are the only legal tender recognised as a medium of payment for cash transactions in Singapore.
And yes, the SG50 notes you have hoarded up at home were issued by MAS.
The ability to print legal tender sounds like everyone’s dream isn’t it?
Yet as Benjamin Parker (Spiderman’s Uncle) says, with great power comes great responsibility. MAS is responsible for ensuring price stability in Singapore and does so by balancing the money supply and demand for Singapore’s currency.
Money supply can have an impact on Singaporeans. For example, printing too much money leads to a decrease in interest rate which may lead to a depreciation in the currency.
Supervises The Finance Sector
Singapore is a well-established financial hub for Asia. With many financial institutions operating in the country, someone has to do the job of regulating and ensuring that these billion dollar financial institutions adhere to the requirements and policies set in place to protect the interest of the average Singaporean. This is where MAS comes in, as a regulator and supervisor to these financial institutions.
The safety of Singaporeans’ money in these financial institutions would not be as secured without the close supervision of MAS in ensuring higher disclosure and transparency of these institutions.
The Government’s Banker
Just like how commercial banks are to us consumers, MAS performs a rather similar role for the government. It provides the government with the facilities to deposit money and works as the official agent to transact money to international financial institutions like the World Bank.
MAS will help manage the government’s financial reserves as well as the debt and issuing of government’s securities.
Do you think MAS has an important role to play? What else should they be focusing on as well. Share with us your thoughts on Facebook.
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