Monetary Authority of Singapore Tightens Stance
April 14, 2022
The Monetary Authority of Singapore, which conducts monetary policy by targeting the external value of the currency rather than a domestic interest rate, took the unusual step today of changing two of the three defining parameters of its Singapore dollar policy, rather than just one. As it did last October and again in January, MAS officials increased the upward-leaning slope of the S$ trading corridor, but for the first time since April 2010 they also raised the midpoint of the trading band. Consumer price inflation in Singapore had accelerated from 0.7% in February 2021 through 2.5% last September to a 9-year high of 4.3% in February 2022. A statement warns that “The fresh shocks to global commodity prices and supply chains are adding to domestic cost pressures, and will bring MAS Core Inflation to a significantly higher level than its historical average through 2022. Underlying inflationary pressures remain a risk over the medium term.”
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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