Singapore on Friday loosened its monetary policy for the first time since 2020, as it strives to boost growth.

The Monetary Authority of Singapore said it would slightly reduce the slope of its exchange rate policy band, known as the Singapore dollar nominal effective exchange rate or S$NEER.

There will be no change to the width of the policy band or the level at which it is centered, MAS added.

Unlike other central banks that tweak their domestic lending rates, MAS opts to changes the exchange rate settings of its currency.

The central bank strengthens or weakens its currency against its main trading partners, thus effectively setting the S$NEER. The exact exchange rate is not set, rather, the S$NEER can move within the set policy band, the precise levels of which are not disclosed.