Semi-Annual Review of Singapore’s Monetary Policy

April 13, 2017

The Monetary Authority of Singapore does not target an interest rate. Instead, monetary policy in a domestic money market sense is derivative of currency policy. The goal is a target corridor for the Singapore dollar’s trade-weighted value. Goals are made for the width of the currency band, its slope over time, and the mid-point between the target ceiling and floor.

Policy is reviewed each April and October. The slope of the target corridor was reduced at three straight meetings, April 2015, October 2015, and April 2016. In April 2016, the slope was cut all the way to zero, and that non-directional bias was retained at the October 2016 and just completed April 2017 reviews. The band midpoint and width has not been changed throughout this whole period.

The latest findings are summarized in a statement released today. The document reiterates the conclusion from last October that ” a neutral policy stance is appropriate for an extended period and should ensure medium-term price stability.” Officials believe “the Singapore economy will continue to expand at a modest pace in 2017. MAS Core Inflation is envisaged to rise gradually, largely on account of higher global oil prices. However, demand-driven inflationary pressures will likely be restrained. Over the medium term, core inflation is expected to trend towards but average slightly below 2%.”

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express  permission.



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