The Monetary Authority of Singapore (MAS) has announced that it will maintain its current monetary policy approach, stating that it is "appropriate" for maintaining price stability in the country.
At its semiannual policy review, the MAS kept the Singapore dollar's nominal effective exchange rate (NEER) policy band unchanged. The central bank uses the NEER to guide monetary policy, allowing the Singapore dollar to fluctuate within a specified range against a basket of currencies.
The decision was widely expected by analysts, who noted that the current policy stance has helped to stabilize the Singapore economy amid the ongoing COVID-19 pandemic.
In a statement, the MAS noted that the global economic outlook remains uncertain, with ongoing risks from the pandemic and geopolitical tensions. However, the central bank also noted that the Singapore economy has shown signs of recovery, with growth expected to be in the upper half of the 4-6% forecast range for 2022.
The MAS also highlighted the risks posed by inflation, particularly as supply chain disruptions and rising commodity prices push up the cost of goods and services. However, the central bank stated that it expects inflation to remain within its forecast range of 1-2% over the medium term.
To support the economy, the MAS will continue to provide ample liquidity to the banking system, while also encouraging prudent lending practices by financial institutions.
Overall, the MAS's decision to maintain its current monetary policy approach is a positive sign for the Singapore economy, which has been hit hard by the COVID-19 pandemic. While risks remain, the central bank's focus on price stability and prudent lending practices is expected to help support growth and stability in the coming months.
In conclusion, the Monetary Authority of Singapore (MAS) has announced that it will maintain its current monetary policy approach, stating that it is "appropriate" for maintaining price stability in the country. The decision was widely expected by analysts, who noted that the current policy stance has helped to stabilize the Singapore economy amid the ongoing COVID-19 pandemic. While risks remain, the MAS's focus on price stability and prudent lending practices is expected to help support growth and stability in the coming months.
