Due to Singapore’s city-state’s mild inflation and rapid development, the central bank decided to maintain its monetary policy on Friday.
The S$NEER policy band’s current rate of appreciation would be maintained, according to the Monetary Authority of Singapore (MAS). Its breadth and the angle at which it is centred won’t alter.
In addition, MAS announced that starting in 2024, it would make monetary policy announcements on a quarterly timetable.
“Against the external outlook, prospects for the Singapore economy are muted in the near term but should improve gradually in H2 2024,” MAS stated in a statement.
Economists were taken aback by the shift to more frequent policy evaluations.
“The shift to a quarterly review is a surprise as the MAS has always emphasised that monetary policy is the medium-term stance rather than short-term,” Chua Hak Bin, an economist at Maybank, said.
According to OCBC researcher Selena Ling, the growing frequency is showing how the geopolitical and economic landscape is evolving.
The commerce ministry announced preliminary data on Friday showing that the country’s GDP expanded by 0.7% yearly from July to September. Growth will be 0.4%, predict the analysts surveyed by Reuters.
From a 14-year high of 5.5% in January and February to 3.4% in August, inflation has decreased.
Lastly, Singapore uses a unique technique of regulating its monetary policy. This works by changing the dollar’s exchange rate against a basket of foreign currencies rather than domestic interest rates. Singapore’s economy is strongly dependent on international trade.
