Singapore Monetary Policy


Singapore: MAS keeps monetary policy unchanged in April

April 15, 2015

At its first scheduled semi-annual meeting of 2015, which took place on 14 April, the Monetary Authority of Singapore (MAS) decided to maintain its stance on the “modest and gradual appreciation” of the Singapore dollar nominal effective exchange rate (S$NEER). The slope, width and level at which the policy band is centered were left unchanged. The decision came after an unscheduled meeting on 28 January 2015 that resulted in the reduction of the slope of the appreciation path and represented the first change the MAS had introduced since April 2012. This unscheduled meeting caught most analysts by surprise and the markets were divided regarding what decisions would be taken at the following meeting in April. Some had expected further easing and others had assumed that the MAS would maintain its stance.

The Central Bank pointed out in its latest statement that the domestic economy is expected to grow at a moderate pace in 2015. The MAS maintained its previous forecast of 2–4% GDP growth as the continued recovery in external demand should be tempered by domestic supply-side constraints. Regarding price developments, the Bank added that, “CPI-All Items inflation and MAS Core Inflation will stay subdued this year due to lower oil prices and moderate pass-through of accumulated domestic cost increases.” The MAS concluded that it would maintain its policy of modest and gradual appreciation of the S$NEER policy band as it is consistent with, “the benign inflation outlook and moderate growth prospects for the whole of 2015, and appropriate for ensuring medium-term price stability in the economy.”

FocusEconomics Consensus Forecast panelists expect the exchange rate to reach 1.34 SGD per USD by end of this year. For 2016, the panel sees the exchange rate at 1.34 SGD per USD as well.

Author:, Economist

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Singapore Monetary Policy Chart

Singapore Exchange Rate April 2015

Source: Monetary Authority of Singapore

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