SGD exchange rate management by MAS

HK government uses a "pegged FX rate". The drawback is "imported inflation". HKD is kept artificially low, so HK living cost is higher.

SG government chose a different strategy – "managed float". Whenever SGD FX rate exceeds the policy band, MAS would buy/sell SGD in the open market, which cost tax payer's money.

Due to the impossible trinity (http://en.wikipedia.org/wiki/Impossible_trinity),
- SG government loses the freedom to set independent interest rate. SGD interest rate is forced to follow USD interest rate.
- China has capital control, Fixed exchange rate and Independent interest rate policy.