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Singapore tightens monetary policy

Staff Writer |
Singapore central bank tightened its monetary policy for the second time this year.

The Monetary Authority of Singapore, on Friday, decided to increase slightly the slope of the S$NEER policy band with the width of the policy band and the level at which it was centered unchanged.

The bank said the latest action is consistent with a modest and gradual appreciation path of the S$NEER policy band that will ensure medium-term price stability.

The MAS applies the exchange rate against a basket of currencies within an undisclosed band as its monetary policy tool. The bank will hold its next monetary policy meeting in April.

With growth likely to ease over the coming year and inflation set to remain low, the bank is unlikely to tighten its policy any further, Gareth Leather and Shilan Shah, economists at Capital Economics, said.

Data published by the Ministry of Trade and Industry, earlier in the day, revealed that the city-state economy expanded at a slower pace of 2.6 percent on year in the third quarter, following prior quarter's 4.1 percent growth.

On a quarter-on-quarter seasonally-adjusted annualized basis, the economy expanded by 4.7 percent, faster than the 1.2 percent growth in the preceding quarter.

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