SINGAPORE – The Monetary Authority of Singapore (MAS) is keeping its Singdollar policy unchanged, it said on Friday (Oct 13).
This came as the Singapore economy grew by 4.6 per cent in the third quarter compared with the same period a year earlier, according to data from the Ministry of Trade and Industry.
This was higher than the 2.9 per cent growth in the preceding three months and the fastest pace in more than three years.
The MAS uses the exchange rate as its main monetary policy tool to strike a balance between inflation from overseas and economic growth. The rate is allowed to float within a policy band that can be adjusted when monetary policy is reviewed.
A stronger currency – which corresponds to tighter monetary policy – counters inflation by making imports cheaper in Singdollar terms, while a weaker Singdollar helps to lift growth by making exports cheaper abroad.
The exchange rate is managed against a basket of currencies of Singapore’s major trading partners.
The Singdollar policy band is now on a path of zero appreciation against the currencies of key trading partners – a “neutral” policy stance put in place in April last year amid slow growth and low inflation.
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