SINGAPORE (Reuters – Singapore’s central banks unexpectedly tightened their monetary policy, saying that it will maintain price stability for the long-term.
Monetary Authority of Singapore, (MAS), manages monetary policies through exchange rate setting, not interest rates. This allows the Singapore Dollar to rise and fall relative to the currencies of its major trading partners in an unspecified band.
It uses three levers to adjust its policy, the slope, the mid-point and the width of the policy range, also known as the Nominal Exchange Rate or S$NEER.
The MAS stated that it will slightly increase the slope of S$NEER’s policy band from zero percent. It stated that the width and level of the policy band will remain the same.
Reuters polled 13 economists and found that eleven predicted the MAS would maintain its current policy, while two expected a slight tightening.
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