Singapore’s central bank has tightened monetary policy in the face of inflation risks, Reuters said
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SINGAPORE (Reuters) – Singapore’s central bank said on Tuesday it was tightening its monetary policy stance in an out-of-cycle move as inflation risks rose.
The Singapore Monetary Authority (MAS) manages monetary policy through the setting of exchange rates, instead of interest rates, in a band that prevents the Singapore dollar from rising or falling against the currency of its major trading partners.
It adjusts its policy through three levers: the slope, midpoint, and width of the policy band, known as the Nominal Effective Exchange Rate, or S $ NEER.
MAS said it would raise the valuation rate of its political band slightly. The width of the policy band and the level of focus will not change.
“This move is based on a preventive shift to an estimating stance in October 2021 and is appropriate to ensure price stability over the medium term,” he said, referring to the hardening move at the end of last year.
Tuesday’s hardening came in a single day when data showed Singapore’s main price gauge rose in December at its fastest pace in nearly eight years.
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