Singapore Slightly Tightens Monetary Policy For Modest, Gradual Appreciation

Source : Channel NewsAsia, 10 October 2007

The Monetary Authority of Singapore (MAS) will continue with the policy of a modest and gradual appreciation of the Singapore dollar.

The slope of the S$NEER policy band will be increased slightly, but there will be no recentring of the policy band, or any change in its width, according to a statement released by the MAS.

The Singapore economy has performed better than expected so far this year, with industries associated with the property, financial advisory and capital markets contributing significantly to the overall GDP growth in the first half of the year.

MAS pointed out, as growth prospects of the US economy have weakened in line with the ongoing correction in the housing market and tighter credit conditions, other economies are also likely to see some softening in the near term.

However, the global economy is expected to remain resilient, particularly in Asia, where domestic demand and regional trade should continue to be firm.

In the Singapore economy, growth will be led by non-IT manufacturing, construction and business services, which have built up a strong momentum and are more dependent on regional and domestic sources of demand as well as developments in specific product markets.

The monetary authority’s assessment is that the Singapore economy is likely to expand at a slower rate in 2008 than in the recent past, reflecting weaker global economic growth.

Singapore’s GDP growth rate is expected to come in within its potential of four to six per cent next year. - CNA/ac