SINGAPORE: The Monetary Authority of Singapore (MAS) will make another "pre-emptive adjustment" in its monetary policy stance amid a further upward shift in Singapore's inflation outlook, the central bank said on Tuesday (Jan 25).
It will "slightly" raise the rate of appreciation of its monetary policy band given the risks of higher core inflation in the near term. There will be no change to the width and the level at which the Singapore dollar's nominal effective exchange rate (S$NEER) policy band is centred.
"This move builds on the pre-emptive shift to an appreciating stance in October 2021 and is appropriate for ensuring medium-term price stability," said MAS.
There has been a "further upward shift in Singapore's inflation outlook, reflecting both global and domestic factors" since the last monetary policy statement in October last year, added the authority.
"MAS has therefore assessed that it is appropriate to make another pre-emptive adjustment in its monetary policy stance at this juncture," it said.
The policy tightening was accompanied by an upwards revision of MAS' 2022 inflation forecast.
Core inflation is now projected to be 2 per cent to 3 per cent this year, up from the 1 per cent to 2 per cent expected in October.
"Meanwhile, CPI-All Items inflation is expected to be 2.5 per cent to 3.5 per cent, from the earlier forecast range of 1.5 per cent to 2.5 per cent," said MAS.
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It will "slightly" raise the rate of appreciation of its monetary policy band given the risks of higher core inflation in the near term. There will be no change to the width and the level at which the Singapore dollar's nominal effective exchange rate (S$NEER) policy band is centred.
"This move builds on the pre-emptive shift to an appreciating stance in October 2021 and is appropriate for ensuring medium-term price stability," said MAS.
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There has been a "further upward shift in Singapore's inflation outlook, reflecting both global and domestic factors" since the last monetary policy statement in October last year, added the authority.
"MAS has therefore assessed that it is appropriate to make another pre-emptive adjustment in its monetary policy stance at this juncture," it said.
The policy tightening was accompanied by an upwards revision of MAS' 2022 inflation forecast.
Core inflation is now projected to be 2 per cent to 3 per cent this year, up from the 1 per cent to 2 per cent expected in October.
"Meanwhile, CPI-All Items inflation is expected to be 2.5 per cent to 3.5 per cent, from the earlier forecast range of 1.5 per cent to 2.5 per cent," said MAS.
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