Singapore Maintains Monetary Policy For Sixth Straight Time
2024-10-11
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(fxcue news) - Singapore central bank maintained its monetary policy for the sixth consecutive meeting on Monday as economic growth improved amid a slowdown in inflation.
The Monetary Authority of Singapore decided to keep the prevailing rate of appreciation of the S$NEER policy band. There will be no change to its width and the level at which it is centered.
The MAS applies the exchange rate against a basket of currencies within an undisclosed band as its monetary policy tool. The MAS last tightened its policy in October 2022.
Policymakers observed that growth momentum has picked up and the negative output gap is set to close in the second half of 2024.
The economy will continue to expand at a steady pace and keep close to its potential path next year, the bank said. For the year as a whole, the central bank expects GDP growth to come in around the upper end of the 2-3 percent forecast range.
MAS core inflation is projected to decline further to around 2 percent by the end of 2024. Overall consumer price inflation is expected to average 1.5-2.5 percent in 2025.
Advance estimate released earlier in the day by the Ministry of Trade and Industry showed that the city-state economy grew at a faster pace of 4.1 percent in the third quarter after rising 2.9 percent in the preceding period.
On a quarter-on-quarter, the economy expanded 2.1 percent, stronger than the 0.4 percent increase in the second quarter.
Capital Economics' economist Shivaan Tandon said, with policy very tight by historical standards, the economy set to weaken and the central bank now appearing less concerned about inflation, the central bank is likely to loosen policy in January.
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