A bike owner rides on Esplanade bridge as buildings stand within the Central Business District in Singapore on Monday, July 6, 2020.
Wei Leng Tay | Bloomberg | Getty Images
SINGAPORE — Singapore’s central financial institution tightened monetary policy in a shock transfer on Thursday because the economic system grew 6.5% within the third quarter in contrast with a yr in the past.
The Monetary Authority of Singapore — the nation’s central financial institution — stated in its twice-yearly monetary policy assertion that it raised barely the slope of its forex band, the Singapore greenback nominal efficient alternate fee.
That means the Singapore greenback is allowed to understand in opposition to a basket of currencies inside an undisclosed band. The width of the band and the extent at which it’s centered are unchanged, the central financial institution stated.
MAS manages monetary policy by way of setting the alternate fee, reasonably than rates of interest. It adjusts the band by way of three levers: the slope, the mid-point and the width.
Eleven out of 13 economists polled by Reuters had anticipated the Singapore central financial institution to maintain its policy unchanged.
MAS stated adjustment to the forex band “will ensure price stability over the medium term while recognising the risks to the economic recovery.”
It expects core inflation — which strips out lodging and personal transport — to rise between 1% to 2% subsequent yr within the medium time period. Core inflation is MAS’ most well-liked worth gauge.
“Growth in the Singapore economy is likely to remain above trend in the quarters ahead. Barring a resurgence of the virus globally or a setback in the pace of economic reopening, output should return to around its potential in 2022,” stated the central financial institution.
“At the same time, external and domestic cost pressures are accumulating, reflecting both normalising demand as well as tight supply conditions,” it added.
Singapore’s economic system grew 6.5% within the third quarter of 2021 in comparison with a yr in the past, official advance estimates confirmed on Thursday.
Analysts polled by Reuters had anticipated the Singapore economic system to develop 6.6% year-on-year within the third quarter.
On a quarter-on-quarter seasonally adjusted foundation, the economic system expanded by 0.8%, Singapore’s Ministry for Trade and Industry stated in a press release.
This is breaking information. Please test again for updates.