SINGAPORE (Reuters) – Singapore’s central bank said on Tuesday it was tightening its monetary policy settings, in an out-of-cycle move, as inflation risks rise.
The Monetary Authority of Singapore (MAS) manages monetary policy through exchange rate settings, rather than interest rates, letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed band.
It adjusts its policy via three levers: the slope, mid-point and width of the policy band, known as the Nominal Effective Exchange Rate, or S$NEER.
The MAS said it would raise slightly the rate of appreciation of its policy band. The width of the policy band and the level at which it is centered will be unchanged.
“This move builds on the pre-emptive shift to an appreciating stance in October 2021 and is appropriate for ensuring medium-term price stability,” it said, referring to its tightening move late last year.
Tuesday’s tightening came just a day after data showed Singapore’s key price gauge climbed in December by the fastest pace in nearly eight years.
(Reporting by Aradhana Aravindan and Anshuman Daga in Singapore; Editing by Christian Schmollinger)
