SINGAPORE, Apr 14 (NNN-CNA) – The Monetary Authority of Singapore (MAS), today announced that, it decided to further tighten monetary policy, in two ways.
According to the newly-published MAS Monetary Policy Statement, first, the authority will re-centre the mid-point of the exchange rate policy band, at the prevailing level of the Singapore dollar Nominal Effective Exchange Rate (S$NEER).
Second, MAS will increase slightly the rate of appreciation of the S$NEER policy band, to exert a continuing dampening effect on inflation. There will be no change to the width of the policy band.
MAS said, this tighter monetary policy stance, which builds on the policy moves in Oct, 2021 and Jan 2022, will slow the inflation momentum and help ensure medium-term price stability.
It said, barring major dislocations to the global economy, the Singapore economy should grow at an above-trend pace for the second consecutive year in 2022. The output gap will turn slightly positive, with aggregate GDP having fully recovered from the pandemic-induced decline.
It also said that the fresh shocks to global commodity prices and supply chains are adding to domestic cost pressures, and will bring MAS Core Inflation, which excludes the costs of accommodation and private transport, to a significantly higher level than its historical average through 2022.
Underlying inflationary pressures remain a risk over the medium term, the authority added.
Therefore, MAS lifted its 2022 forecast range of MAS core inflation to 2.5-3.5 percent from the 2.0-3.0 percent expected in Jan, and that of CPI-All Items inflation to 4.5-5.5 percent from the Jan-expected 2.5-3.5 percent.– NNN-CNA
