In line with expectations, the Monetary Authority of Singapore (MAS) kept its exchange rate-based policy unchanged today during the semi-annual review.
This has been done despite Singapore’s economy showing an improved performance growing at 4.6 per cent in the third quarter, which is faster than the 2.9 per cent growth in the previous quarter. Ministry of Trade and Industry released the figures in the morning today.
The central bank said it will maintain the rate of appreciation of the Singapore dollar nominal effective exchange rate (SGDNEER) at zero per cent. It added that the width of the policy band and the level at which it is centred will be unchanged.
Speaking on the economy, MAS said, “The Singapore economy has performed slightly better than envisaged since its policy meeting in April, while inflation has kept well within expectations.”
The central bank expects full-year GDP growth to come in at the upper half of the 2 to 3 per cent forecast range. For 2018, the Singapore economy is likely to expand at a steady but slightly slower pace.
On the issue of core inflation, MAS said, “It is expected to be broadly stable throughout next year though it could trend upwards to average slightly below 2 per cent over the medium term.”
Last April, MAS unexpectedly flattened the slope of the band it uses to guide the local currency against an undisclosed trading basket, reducing the rate of appreciation to zero per cent.