Web Stories Wednesday, April 17

SINGAPORE: The Monetary Authority of Singapore (MAS) kept its exchange rate-based monetary policy unchanged on Friday (Apr 12), in line with analysts’ expectations.

This is the fourth time in a row that the central bank has held policy steady. 

In its April monetary policy statement, MAS said it would maintain the prevailing rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, and no changes would be made to its width and the level at which it is centred. 

“MAS will closely monitor global and domestic economic developments, and remain vigilant to risks to inflation and growth,” the statement said.

All 11 analysts polled by Reuters expected MAS to keep monetary policy unchanged at this meeting.

Instead of using interest rates like other central banks, MAS manages monetary policy by letting the Singapore dollar strengthen or weaken against the currencies of the country’s main trading partners within the undisclosed S$NEER band.

To adjust policy, it changes the slope, mid-point and width of the band.

MAS has left monetary policy unchanged since October 2022, when the central bank re-centred the mid-point of its band.


MAS said that prospects for Singapore’s economy should improve over the year, noting that GDP growth is expected to be between 1 per cent and 3 per cent.

“The recovery in the manufacturing and financial sectors should resume, supported by the upturn in the electronics cycle and anticipated easing in global interest rates,” the central bank said. 

Growth in domestic-oriented sectors is also projected to normalise towards pre-pandemic rates.

The Ministry of Trade on Industry on Friday released advance GDP estimates for the first quarter of 2024 showing faster growth in consumer-facing sectors, which were partly supported by an increase in tourist arrivals.

Singapore’s economy grew 2.7 per cent year-on-year in the first quarter of 2024, according to the estimates.

Global economic growth remained resilient at the beginning of the year, and is expected to be tempered in the near term among Singapore’s major trading partners because of the effect of past monetary policy tightening and the withdrawal of expansionary fiscal policies.

Final demand should pick up in the later part of the year in line with the anticipated easing of global monetary policy, and global manufacturing should continue to recover, MAS said. 

“This outlook is subject to uncertainties, including around the pace and timing of monetary policy easing and the intensity of ongoing geopolitical conflicts,” the central bank added.

In terms of inflation, MAS said it expects core inflation to stay elevated in the near term before easing “more discernibly” in the fourth quarter of 2024 and into 2025. 

Core inflation excludes the costs of accommodation and private transport.

MAS noted that water prices rose in April, adding that the prices of services such as education and healthcare will continue to catch up to higher costs.


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