With continued weakening growth and inflation easing, economists widely expected the central bank to intervene ahead of its next meeting in April. -- PHOTO: ASSOCIATED PRESS
THE Monetary Authority of Singapore (MAS) said there are no plans to change its current exchange rate policy stance.
The central bank's executive director of economic policy Edward Robinson said: 'We stress that the policy is appropirate given the forecast for inflation and GDP growth next year.
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At this stage, there are no plans for an interim policy move. But we will obviously be very vigilant to changes in both economic and financial conditions. Let me reiterate again there is no change in policy stance. It remains appropriate.'
He added that while the MAS does not comment on movements of the Sing dollar within the policy band, the local unit 'remains within the band'.
He said: 'The MAS will take action as necessary to intervene and to dampen excess volatility as needed. Also I think there is no reason for undue weakness in the currency.'
With slumping exports from slowing global demand, the MAS shifted to a neutral exchange rate policy in October to keep exports cheaper.
But with continued weakening growth and inflation easing, economists widely expected the central bank to intervene ahead of its next meeting in April to weaken the Sing dollar further in order to boost exports.
Morgan Stanley has predicted the MAS to shift to an 'aggressive policy' and for the Sing dollar to weaken to $1.80 against the US dollar by the middle of next year.
With regard to liquidity in the money markets, Mr Robinson said: 'As evidence that things have certainly stabilised, the Sing dollar Sibor rate and US dollar Sibor rate have both eased.
Let me reiterate that we continue to watch conditions in the money markets and will stand ready to inject liquidity should that be necessary. But there has been no cause for extraordinary actions on the part of the MAS as far as short term money markets in Singapore are concerned.'
