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Singapore central bank cuts monetary policy on stagnant growth

Staff writer |
Stagnant growth pushed Singapore’s central bank to a neutral policy of zero percent appreciation in the exchange rate, a rate last seen during the global financial crisis.

The unexpected easing of monetary policy by the Monetary Authority of Singapore was in response to the trade ministry reporting the same day that Singapore’s gross domestic product in the first quarter grew 0% on an annualized basis, compared with the previous three months.

The move drove lower both the local dollar and currencies across Asia-Pacific. The Singapore dollar fell 0.9% to 1.3627 per U.S. dollar late Thursday.

In a report, the International Monetary Fund predicted Singapore’s economy would grow 1.8% this year, compared with the government’s projection of 1% to 3%.

Singapore’s services industry, which makes up about two-thirds of the economy, contracted an annualized 3.8% in the first quarter from the previous three months, the first decline since the first quarter of 2015.

Manufacturing and construction rebounded strongly in the quarter, expanding 18.2% and 10.2% respectively.

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