SINGAPORE ADJUSTS MONETARY POLICY STANCE
SINGAPORE, The Monetary Authority of Singapore (MAS) has decided to increase slightly the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band from zero per cent previously.
The width of the policy band and the level at which it is centred will be unchanged, it said in its Monetary Policy Statement issued here.
MAS said the decision was made on anticipation that the republic’s economy was likely to remain on its steady expansion path in 2018.
Upward pressures on MAS Core Inflation too were expected to persist over the course of this year and beyond, underpinned by an improving labour market, it said.
This policy stance is consistent with a modest and gradual appreciation path of the S$NEER policy band that will ensure medium-term price stability, said Singapore’s central bank.
NEER is an unadjusted weighted average rate at which one country’s currency exchanges for a basket of multiple foreign currencies.
In economics, the NEER is an indicator of a country’s international competitiveness in terms of the foreign exchange market.
MAS said the measured adjustment to the policy stance took into account the uncertainty in macroeconomic outcomes presented by the ongoing trade tensions.
It noted that an escalation of the US-China trade dispute remained possible, and if it were to occur, it would have significant consequences for global trade.
Citing the Advance Estimates released by the Ministry of Trade and Industry today, MAS said, Singapore’s economy, year-on-year, rose by an estimated 4.3 per cent in the first quarter 2018, following growth of 3.6 per cent for 2017 as a whole.
On the whole, the Singapore’s gross domestic product growth in 2018 should come in slightly above the middle of the forecast range of 1.5�3.5 per cent.
MAS Core Inflation, meanwhile edged up to average 1.6 per cent year-on-year in January�February 2018, from 1.4 per cent in Q4 2017.
For 2018, core inflation should come in within the upper half of the one-two per cent forecast range, it said’.
Source: NAM News Network