Singapore (VNA) - The Monetary Authority of Singapore (MAS) announced on July 27 that it will tighten monetary policy.
MAS said Singapore's economy is expected to post strong growth in the second half of this year, while external price pressures are likely to continue affecting consumers. Core inflation, which excludes private transport and accommodation, is projected to step up from July and remain elevated until early next year.
The authority said it will leave unchanged the width and midpoint of the policy band, noting that a tighter policy stance will strengthen the Singapore dollar (SGD) and could help ease imported inflation.
The policy tightening in April, which followed a period of broad S$NEER appreciation, has contributed to a dampening of inflationary pressures in the economy, it added.
MAS said it remains well positioned to address risks to medium-term price stability. It will continue to closely monitor economic developments and stands ready to intervene to prevent excessive fluctuations in the S$NEER.
At its previous policy review in April, MAS slightly increased the slope of the S$NEER policy band while keeping its width and midpoint unchanged. Unlike most central banks, which use interest rates as their main monetary policy tool, MAS primarily conducts monetary policy through exchange-rate management.
Under this framework, the Singapore dollar is allowed to fluctuate within an undisclosed band against a basket of currencies of the country's major trading partners./.
