By Patricia Lui
April 14 (Bloomberg) -- Singapore’s central bank has “re- centered” the exchange-rate band in which the local dollar is managed at a twice-yearly policy review today.
The Monetary Authority of Singapore relies on the currency rather than interest rates as its policy tool. The move to depreciate the currency was predicted by 15 of 17 economists surveyed by Bloomberg News last month. Policy makers maintained a neutral stance, signaling they will seek neither gains nor losses in the city-state’s dollar, and left the width of the trading band unchanged.
“The current level of the Singapore dollar nominal effective exchange rate is appropriate for maintaining domestic price stability over the medium term, taking into account the prospects for growth in the Singapore economy,” the bank said in an e-mailed statement. “MAS will therefore re-centre the exchange rate policy band to the prevailing level of the Singapore dollar nominal effective exchange rate.”
The local currency climbed 1 percent to S$1.5015 versus the U.S. dollar as of 8:27 a.m. in Singapore, paring this year’s loss to 3.8 percent.
Singapore’s economy remains “sound” and its financial system is “resilient,” the central bank added. “There is therefore no reason for any undue weakening of the Singapore dollar.”
To contact the reporter on this story: Patricia Lui at plui4@bloomberg.net
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