Singapore keeps monetary policy settings unchanged

SINGAPORE  -Singapore’s central bank on Friday kept its monetary policy unchanged, as expected, as inflation in the city-state moderates and economic growth was higher than expected.

The Monetary Authority of Singapore (MAS) said it 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 centered.

MAS also said it would move to a quarterly schedule of issuing monetary policy statements from 2024, which would be released in January, April, July, and October.

“Against the external outlook, prospects for the Singapore economy are muted in the near term but should improve gradually in H2 2024,” MAS said in a statement.

The move to more frequent policy reviews surprised economists.

“The shift to a quarterly review is a surprise as the MAS has always emphasized that monetary policy is the medium-term stance rather than short-term,” Maybank economist Chua Hak Bin said.

OCBC economist Selena Ling said the increased frequency was a reflection of how the global economic and geopolitical landscape is evolving.

READ: Singapore downgrades GDP outlook, avoids recession

Gross domestic product (GDP) rose 0.7 percent in the July to September period on a yearly basis, according to advance estimates published by the trade ministry on Friday. Economists polled by Reuters had expected growth of 0.4 percent.

Inflation has cooled from a 14-year high of 5.5 percent in January and February to 3.4 percent in August.

READ: Singapore August core inflation rises 3.4%, seen easing

As a heavily trade-reliant economy, Singapore uses a unique method of managing monetary policy, tweaking the exchange rate of its dollar against a basket of currencies instead of domestic interest rates like most other countries.