SINGAPORE — Singapore’s central bank unexpectedly tightened its monetary policy on Thursday, saying the move will ensure price stability over the medium-term.
The Monetary Authority of Singapore (MAS) manages monetary policy through exchange rate settings, rather than interest rates, letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed band.
It adjusts its policy via three levers: the slope, mid-point and width of the policy band, known as the Nominal Effective Exchange Rate, or S$NEER.
The MAS said it would raise slightly the slope of the S$NEER policy band, from zero percent previously. The width of the policy band and the level at which it is centered will be unchanged, it said.
Eleven of 13 economists polled by Reuters had forecast https://www.reuters.com/world/asia-pacific/singapore-forge-with-economic-recovery-cbank-hold-2021-10-11 the MAS would keep its policy unchanged, while only two had expected a slight tightening.
(Reporting by Singapore bureau; Editing by Sam Holmes)