MAS tightens monetary policy for the fifth time in a year to dampen inflation

SINGAPORE: The Monetary Authority of Singapore (MAS) has tightened monetary policy for the fifth time in a year, allowing a further strengthening in the Singapore dollar to help dampen inflation.

In its half-yearly monetary policy statement released on Friday (Oct 14), the Singapore central bank said it will re-centre the mid-point of the Singapore dollar nominal effective exchange rate (S$NEER) policy band “up its prevailing level”.

The slope and width of the band were left unchanged.

The central bank noted that the global economy faces high inflation and lower growth next year, while Singapore’s economic growth will “come in below trend” in 2023 amid intensified downside risks.

At the same time, core inflation is expected to remain elevated over the next few quarters, with risks still tilted to the upside.

“MAS has assessed that, on balance, a further tightening of monetary policy is needed to help ensure that price pressures are dampened over the next few quarters,” it said.

This marks the MAS’ fifth consecutive policy tightening move since October 2021.

It described the latest announcement as “building on past tightening moves” and will help to further reduce imported inflation and curb domestic cost pressures.

“The policy stance will help dampen inflation in the near term and ensure medium-term price stability, providing the basis for sustainable economic growth,” it said.

“MAS will continue to closely monitor global and domestic economic developments, amid heightened uncertainty on both the inflation and growth fronts.”

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