Singapore tightens monetary policy

Singapore tightens monetary policy
(Photo: Xinhua/Then Chih Wey/IANS)

Singapore, Oct 14 (IANS) The Monetary Authority of Singapore (MAS) on Thursday announced that it will raise slightly the slope of the Singapore dollar Nominal Effective Exchange Rate (S$NEER) policy band, up from zero per cent previously.

This indicates the central bank has tightened its monetary policy, reports Xinhua news agency.

The width of the policy band and the level at which it is centred will be unchanged, said the authority, adding that this appreciation path for the S$NEER policy band will ensure price stability over the medium term while recognising the risks to the economic recovery.

MAS said that the growth in the Singapore economy is likely to remain above trend in the quarters ahead.

Barring a resurgence of the virus globally or a setback in the pace of economic reopening, output should return to around its potential in 2022.

It also said that Singapore's external and domestic cost pressures are accumulating, reflecting both normalising demand as well as tight supply conditions.

According to the authority, Singapore's MAS Core Inflation, which excludes the costs of accommodation and private transport, rose to a year-on-year 1.1 per cent in July-August, from 0.7 per cent in the second quarter of this year.

For 2021 as a whole, the MAS Core Inflation will come in near the upper end of the 0-1 per cent forecast range, and is expected to increase further to 1-2 per cent in 2022.

The CPI-All Items inflation will come in around 2 per cent in 2021 and average 1.5-2.5 per cent next year.