SG: Monetary Authority Announcement

Highlights

The Monetary Authority of Singapore has announced at its meeting today that it will adjust monetary policy settings. The MAS pursues its inflation and growth objectives by adjusting the direction, slope, width, and central level of an undisclosed"band" around its measure of Singapore's nominal effective exchange rate. Officials today announced that they will target a"very slightly" increased pace of appreciation.

In the statement accompanying today's decision, officials note that recent GDP data had been stronger than they expected, partly reflecting strong investment spending and export growth driven by AI-demand. They expect solid growth in the near-term. Officials also noted risks to the inflation outlook but retained their forecasts for annual headline and core inflation to both be in the 1.5-2.5 percent range this year.

Based on this assessment, officials concluded that a slightly higher rate of currency appreciation was required to ensure medium-term price stability. The MAS has shown in the past a willingness to make unscheduled adjustments to policy settings and officials advised today that they will closely monitor economic developments and remain vigilant to risks to inflation and growth.

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