Singapore Q1 GDP +3.8% yr/yr vs Reuters poll +4.3% – flash estimate
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Singapore Q1 GDP -0.8% qtr/qtr seasonally adjusted rate – flash estimate
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Singapore MTI downgrades 2025 GDP growth forecast to 0.0% to +2.0%
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Singapore MTI says external demand outlook for Singapore for rest of the year has weakened significantly
From the Monetary Authority of Singapore, loosened its monetary policy, as had been expected by the market:
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MAS will continue with the policy of a modest and gradual appreciation of the S$NEER policy band
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There will be no change to the width of the band and the level at which it is centred
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However, the rate of appreciation will be reduced slightly … this is the easing referred to
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Singapore’s MAS: MAS core inflation is forecast to stay well below 2%
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Singapore’s MAS: Risks to inflation are tilted towards the downside
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Singapore’s MAS: Imported and domestic cost pressures will remain low
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Note that the MAS’s key monetary policy tool is its exchange rate policy. It adjusts the exchange rate of its dollar (SGD) instead of changing domestic interest rates like most other economies.
It manages the SGD exchange rate against a basket of currencies of Singapore’s major trading partners.
- sets the path of the policy band of the Singapore dollar nominal effective exchange rate (S$NEER)
- this serves to strengthen or weaken the local currency against those of its main trading partners
S$NEER is a combined index made up of bilateral exchange rates between Singapore and its major trading partners
- is a trade-weighted exchange rate
MAS permits the S$NEER to move up and down within the policy band (exact levels are not disclosed). If it goes out of this band, the MAS steps in by buying or selling Singapore dollars.
The policy band has three parameters that the MAS can adjust:
- the slope, the level and the width
- adjusting the slope will influence the pace at which the Singapore dollar strengthens or weakens
- adjusting the level, or mid-point, of the policy band allows for an immediate strengthening or weakening of the S$NEER,
- widening the policy band allows for more volatility of the S$NEER
- these parameters are what are reviewed
