Monetary Authority of Singapore Tightened Monetary Policy to Slow Inflation’s Momentum 

The Monetary Authority of Singapore (MAS), Singapore’s central bank tightened its monetary policy on Thursday. The MAS manages monetary policy through exchange rate settings, rather than interest rates. The authority re-centered the mid-point of the Nominal Effective Exchange Rate, or S$NEER, at the prevailing level of the S$NEER. It also increased slightly the rate of appreciation of the policy band.

Singapore MAS

The MAS adjusts its policy via three levers: the slope, mid-point and width of the policy band.

The Monetary Authority of Singapore announced it would re-center the mid-point of the exchange rate policy band known as the Nominal Effective Exchange Rate, or S$NEER, at the prevailing level of the S$NEER.

MAS will also increase slightly the rate of appreciation of the policy band.

There will be no change to the width of the policy band.

The MAS manages monetary policy through exchange rate settings because trade flows dwarf its economy, letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed band.

All 16 economists polled by Reuters expected the MAS to tighten but they were divided on which parameters it would change.

Source: MAS, Reuters

From The TradersCommunity News Desk