Singapore pauses tightening monetary policy, focuses on economic growth

Singapore (VNA) - After focusing on curbing inflation, the Monetary Authority of Singapore (MAS) has decided to pause monetary policy tightening as it considers growing risks confronting the economy.

The April 14 decision marks the first time in more than a year that the MAS is standing pat on monetary policy, after making five consecutive tightening moves since October 2021 to tame inflation.

The Singaporean economy is already showing signs of hitting the brakes, with advance estimates for the first quarter of 2023 indicating that year-on-year growth was 0.1%, a sharp slowdown from 2.1% in the previous quarter.

Growth momentum has slowed significantly and inflation peaked, and likely to moderate going forward. The changing risk dynamics between growth and inflation has prompted MAS to rebalance its exchange rate policy, said a note from DBS Group Research.

MAS, which uses the exchange rate as its main policy tool, said it will maintain the prevailing rate of appreciation of its Singapore dollar nominal effective exchange rate (S$NEER) policy band. There will also be no changes to the width and the mid-point of the band, it added in its half-yearly policy review./.