SINGAPORE (Businesshala) – Singapore’s central bank unexpectedly tightened its monetary policy on Thursday, saying the move would ensure price stability in the medium term.
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 against the currencies of its main trading partners within an undisclosed band.
It adjusts its policy through three levers: the slope, mid-point and width of the policy band, known as the nominal effective exchange rate, or S$NEER.
MAS said it will slightly increase the slope of the S$NEER policy band from the earlier zero percent. It added that the width of the policy band and the level at which it is centered will remain unchanged.
Eleven of the 13 economists surveyed by Businesshala predicted that the MAS would keep its policy unchanged, while only two expected it to be slightly stricter.