The Monetary Authority of Singapore (MAS) has announced it will maintain its policy of a modest and gradual appreciation of the Singapore Dollar Nominal Effective Exchange Rate policy band.

The MAS said in its October 14 statement that "there will be no change to the slope of the policy band" as the Singapore economy projected to "grow modestly for the rest of the year and into 2014 as the external environment continues to improve".

The central bank projected that gross domestic product (GDP) growth would be 2.5 percent to 3.5 percent this year and next year.

The policy stance is assessed to be appropriate, taking into account the balance of risks between external demand uncertainties and rising domestic inflationary pressures, it said.

Inflation should come in at 1.5 percent and 2 percent for 2013 and rise to 2 percent to 3 per cent in 2014, as rentals on owner-occupied accommodation and COE premiums are expected to increase, it added.

The MAS issued the statement right after the Ministry of Trade and Industry announced its estimated GDP growth in the third quarter of falling 1 percent on a quarter-on-quarter seasonally adjusted annualised basis.

The economy expanded by a revised 16.9 percent in Q2 on a quarter-on-quarter seasonally adjusted annualised basis.

On a year-on-year basis, the Singapore economy grew by 5.1 percent in Q3. Manufacturing grew by 4.5 percent, higher than the 1.3 percent growth in the preceding quarter, on a year-on-year basis. The construction sector grew 3.6 percent on a year-on-year basis, moderating from the 6.9 percent growth in the previous three months.-VNA