Monetary Authority of Singapore with a surprise, a tightening was widely expected.
- Will maintain the prevailing rate of appreciation of the S$NEER policy band
- There will be no change to its width and the level at which it is centred
- Will be no change to its width and the level at which it is centred
Headlines via Reuters
- This policy stance will continue to reduce imported inflation and help curb domestic cost pressures
- Says for 2023 as a whole, MAS core inflation is expected to average 3.5–4.5%
- Singapore’s GDP growth is projected to step down to 0.5–2.5% in 2023, from 3.6% last year
- Will remain vigilant over developments in economy & financial markets, amid heightened uncertainty on both inflation and growth
- Prospects for Singapore's GDP growth this year have dimmed
- Says mas CPI-all items inflation is forecast to come in higher at 5.5–6.5% for 2023
- Assessed that current appreciating path of S$NEER policy band is sufficiently tight, appropriate for securing medium-term price stability
- Effects of MAS’ monetary policy tightening are still working through economy and should dampen inflation further
- Pace of expansion in the domestic-oriented sectors should moderate as higher consumer prices and interest rates restrain spending
- Says excluding the effects of the GST increase, core inflation is projected to average 2.5–3.5%, and headline inflation 4.5–5.5% for 2023
- Singapore’s GDP growth is projected to be below trend this year
- Says mas core inflation is projected to reach around 2.5% y-o-y by the end of 2023
- With intensifying risks to global growth, domestic economic slowdown could be deeper than anticipated this year
- Singapore’s GDP growth is projected to moderate significantly this year, in line with the global goods and investment cycle downturn
- Mas says when the impact of the GST increase is excluded, core inflation would be even lower, and closer to the historical average in 2023
- MAS’ five successive monetary policy tightening moves since Oct 2021 have tempered momentum of price increases
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For background, this from the previous meeting, in October 2022, Singapore's central bank (the Monetary Authority of Singapore) tightened policy.
- for the 4th time in 2022
- for the fifth time since they began to tighten in October 2021
- responding to rising inflation
- MAS re-centred the currency band to prevailing levels
- but kept the slope and the width of the band unchanged
More on that decision is here:
In the policy statement at the time (October 14 2022) the MAS noted:
- Over the last three months, the S$NEER has broadly appreciated and is now close to the top of the policy band.
- The three-month S$ Singapore Interbank Offered Rate (SIBOR) rose to 3.4% from 2.5% in July, while the Singapore Overnight Rate Average (SORA) increased to 3.4% from 2.1%.
Note that one of the MAS's key tools is its exchange rate policy. It manages the SGD exchange rate against a basket of currencies of Singapore's major trading partners. MAS adjusts the policy band as necessary to maintain price stability and support economic growth.
