Singapore’s central bank tightened its monetary policy for the third straight time, as global inflationary pressures and tight labor market continued to exert upward pressure on inflation.
The Monetary Authority of Singapore, on Thursday, decided to re-centre the mid-point of the exchange rate policy band at the prevailing level of the S$NEER.
The MAS will also increase slightly the rate of appreciation of the policy band to exert a continuing dampening effect on inflation. There was no change to the width of the policy band or the level at which it was centred.
“This off-cycle move was assessed to be necessary in view of the upward revision to the MAS Core Inflation forecast amid rapidly accumulating external and domestic cost pressures,” the bank said.
This was the third policy adjustment after taking such actions in October and January.
The MAS applies the exchange rate against a basket of currencies within an undisclosed band as its monetary policy tool.
The bank raised its core inflation forecast to 2.5-3.5 percent this year, from the 2.0-3.0 percent expected in January. Likewise, the overall inflation outlook was lifted to 4.5-5.5 percent from the earlier range of 2.5-3.5 percent.
In the absence of further disruptions caused by the Ukraine war or a severe setback in the trajectory of the pandemic, the bank said the city-state economy will grow 3-5 percent this year.
Elsewhere, data released by the Ministry of Trade and Industry showed that the economic growth eased to 3.4 percent in the first quarter from 6.1 percent in the preceding period.
On a quarter-on-quarter seasonally-adjusted basis, gross domestic product climbed 0.4 percent, slower than the 2.3 percent growth registered in the previous quarter.
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