Monetary Authority of Singapore’s Stance Kept Unchanged

April 14, 2015

Monetary policy in Singapore is subordinated to an exchange rate policy.  Like the previous five semi-annual reviews, the mid-point, slope, and width of the Singapore dollar target band were left unchanged.  A policy tightening in April 2012 via a steepening slope in the currency corridor reversed a flattening slope that was implemented six months earlier in October 2011.  Before then, policy had been tightened in April 2010, October 2010, and April 2011.

The central bank website posted a statement today, concluding

The Singapore economy is evolving as envisaged in the January MPS.  GDP is on track to grow at 2–4% in 2015, and there is no change to the forecasts for CPI-All Items inflation and MAS Core Inflation.  External price pressures should be contained, while domestic cost pass-through to consumer prices is expected to be moderate this year.  Beyond the near term, underlying cost and price pressures could pick up, given the continued tightness in the labor market.  

MAS will therefore maintain the policy of a modest and gradual appreciation of the S$NEER policy band.  There will be no change to the slope and width of the policy band, and the level at which it is centered.  This policy stance is consistent with the benign inflation outlook and moderate growth prospects for the whole of 2015, and appropriate for ensuring medium-term price stability in the economy. 

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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