Singapore Monetary Authority relaxes monetary policy for the first time in three years

[Singapore 14th Reuters]-The Singapore Monetary Authority (MAS, Central Bank) relaxed monetary policy for the first time in 3 years, as expected on the 14th.

The Singapore economy, like other Asian countries that depend on trade, has been hit by the US-China trade war and the global economic slowdown.

MAS has stated that it will “slightly moderate” the slope of the Singapore Dollar nominal effective rate (NEER) policy band. It was suggested that the mitigation was less than some expectations. The width and median were left unchanged.

MAS operates monetary policy by adjusting the slope, median, and width of the Singapore dollar NEER policy band rather than interest rates.

The Singapore dollar rose slightly against the US dollar <SGD =>.

Barclays economist Brian Tan pointed out, “The rate of increase has been moderately moderated. MAS is still positive because the policy is not neutral.”

In the Reuters economist survey, all 11 people anticipated policy relaxation. MAS policy has been relaxed since April 2016.

In the last two monetary policy reviews, the rate of increase in the policy band was raised to manage price pressures and support the exchange rate. Tightening was the first time in six years.

The Q3 GDP figures announced on the same day were seasonally adjusted and increased by 0.6% year-on-year, below market expectations, but a recession was avoided.

MAS expects the GDP growth rate for 2019 to be in the middle of the expected range (0–1%) and to “slightly improve” in 2020.

However, economists point out that there is room for further relaxation next year.

“Continuum economics chief economist Jeff Ng,“ (MAS) decided to take a step-by-step approach instead of taking the lead. ” “If the slowing growth rate trend continues for 2020, policy relaxation may be implemented next year,” he said.