By Amanda Lee
SINGAPORE--Singapore's central bank kept its monetary policy unchanged for a fourth straight time, saying current settings are needed to keep imported inflation and domestic cost pressures in check.
The Monetary Authority of Singapore said Friday that the prevailing rate of appreciation of the Singapore dollar nominal effective exchange rate policy band is sufficient to ensure medium-term price stability. There will be no change to the width and the level at which the S$NEER policy band is centred.
All 13 economists and analysts surveyed by The Wall Street Journal had expected the MAS to keep its policy unchanged. While many view the door to policy normalization as potentially ajar, sticky inflation persists, and most think the central bank will wait to see more evidence that inflation has stabilized before making any moves.
The MAS continues to think that the city-state's economy will improve this year, reiterating its projection for growth of between 1%-3%. The economy expanded by 1.1% in 2023.
MAS core inflation will likely stay high in the next quarters, after rising at the start of the year due to factors like the GST hike, and higher electricity & gas tariffs from the carbon-tax hike. It should then cool down more in the final quarter of the year and into 2025, the central bank said.
"For 2024 as a whole, both MAS Core Inflation and CPI-All Items inflation are projected to come in at an average of 2.5-3.5%," it said. Excluding the GST impact, core and headline inflation are forecast at 1.5%-2.5%.
MAS said that it will closely monitor global and domestic economic developments, as well as risks to inflation and growth. These include shocks to global food and energy prices, which could fan inflationary pressures.
The MAS's monetary policy is centered on Singapore's exchange rate, which it considers an effective tool for maintaining price stability in the small and open economy.
Write to Amanda Lee at amanda.lee@wsj.com
(END) Dow Jones Newswires
04-11-24 2048ET
