Singapore's central bank tightened its monetary policy in an off-cycle move on Thursday (July 14), stating that the step will moderate inflation momentum as the city-state intensifies its fight against rising consumer prices.
The Monetary Authority of Singapore (MAS) announced that it will realign the midpoint of the Nominal Effective Exchange Rate (S$NEER) policy range. It was said that neither the slope nor the breadth of the band will be altered.
This policy action, which builds on prior tightening measures, should help moderate inflation's progress and guarantee medium-term price stability.
Singapore's central bank tightened its monetary policy in April to combat rising costs exacerbated by the Ukraine conflict and global supply disruptions.
Because trade flows dwarf Singapore's economy, the Monetary Authority of Singapore (MAS) manages monetary policy through exchange rate settings rather than interest rates, allowing the Singapore dollar to rise or fall within an unspecified band against the currencies of its principal trading partners.
It alters its policy using three levers: the policy band's slope, midpoint, and breadth.
The policy shift occurred after the central bank stated that Singapore's gross domestic product growth rate is expected to land in the lower half of the 3-5 percent forecast range for 2022, and that core inflation is now anticipated to range between 3.0–4.0% for the year, up from an earlier projection of 2.5–3.5%.
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