SGD – MAS has decided to increase the slope of the S$NEER policy band slightly

Monetary Authority of Singapore (MAS)

  • Says has decided to increase slightly the slope of the S$NEER policy band, from zero pct previously
  • The width of the policy band and the level at which it is centred will be unchanged 
  • MAS says policy stance is consistent with a modest and gradual appreciation path of the S$NEER policy band that will ensure medium-term price stability
  • MAS says the measured adjustment to the policy stance takes into account the uncertainty in macroeconomic outcomes presented by ongoing trade tensions
  • Says will continue to closely monitor economic developments.
  • Says Singapore economy is likely to remain on its steady expansion path in 2018
  • Says upward pressures on MAS core inflation are
    expected to persist over the course of this year and beyond,
    underpinned by an improving labour market

Singapore dollar up after the MAS policy announcement:

This is the first tightening in monetary policy from the MAS in 6 years 

Note that the MAS manages monetary policy through exchange rate settings

  • Not via interest rates
  • Tightening achieved by slightly increasing the appreciation rate of the Singapore dollar’s policy band from zero percent

12 of 19 analysts polled by Reuters expected the tightening this month 

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