Singapore Central Bank Gives Itself Room To Tighten In 2018
Singapore’s >central bank left its neutral policy stance unchanged on Friday, without re-committing that it remains appropriate for an extended period, giving itself room to tighten next year if necessary.
After easing three times between January 2015 and April last year, the Monetary Authority of Singapore stuck to its >neutral stance of zero appreciation in the currency, in line with the forecasts of all but one of the 23 economists >surveyed by Bloomberg. The MAS is the only central bank in a major developed nation to use the exchange rate as its main tool.
The MAS >referred to comments in its October 2016 statement that the neutral stance would be appropriate for an “extended period,” without explicitly repeating that guidance going forward.
“By dropping that, they sort of change the tone and signal that they could tighten into next year but haven’t yet pulled the trigger,” Michael Wan, an economist at Credit Suisse Group AG in Singapore, said by phone. Similar to policy makers in other developed countries, like the European Central Bank, “they want to give themselves space to tighten if inflation picks up because of stronger growth.”