Singapore's central bank reduces slope of currency band to zero

Author: Eamonn Sheridan | Category: Central Banks

The Monetary Authority of Singapore adjusts monetary policy for the country through currency control, not via interest rates. 

  • by reducing the slope to zero the MAS does not want the SGD to appreciate
  • a lower SGD is a stimulatory, easing, policy from the MAS. 

MAS says it will adopt a zero percent per annum rate of appreciation of the policy band starting at the prevailing level of the SGD NEER 

  • there will be no change to the width of the policy band.
  • Says this policy decision hence affirms the present level of the S$NEER, as well as the width and zero percent appreciation slope of the policy band going forward
  • core inflation is likely to remain below its historical average in the near and medium term
  • Says MAS' money market operations will at the same time provide sufficient liquidity to the financial system
  • will continue to be vigilant over developments in the economy and financial markets, and stands ready to curb excessive volatility in the SGD NEER
  • says both MAS core inflation and CPI -all items inflation are expected to average between −1 and 0% in 2020
  • says external sources of inflation are likely to weaken in the near term amid the global downturn
  • resident unemployment rate is expected to rise and wage growth ease
  • Says the SGD has has has depreciated to a level slightly below the mid-point of the policy band
  • Singapore economy will enter a recession this year, with GDP growth projected at −4 to −1%.
The Monetary Authority of Singapore is Singapore's central bank. Along with other central banks around the globe, jumps on the easing trend. 

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