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Singapore dollar falls on lower inflation forecast

Published on Apr 14, 2014 1:39 PM
 
The Monetary Authority of Singapore. -- ST FILE PHOTO: RICHARD CHNG 

SINGAPORE (Reuters) - The Singapore dollar slid on Monday after the central bank's lower inflation outlook sparked profit-taking, while most emerging Asian currencies eased on broad strength in the U.S. dollar and risk aversion.

The Monetary Authority of Singapore in its semi-annual policy review statement slightly trimmed its 2014 forecast for headline inflation to 1.5-2.5 per cent from 2-3 per cent previously, while keeping core inflation at 2-3 per cent.

The central bank stuck to a tight monetary policy stance, saying it would maintain its policy of allowing a "modest and gradual" appreciation of the Singapore dollar, with no changes to the slope, width or centre of the policy band.

"US dollar/Singapore dollar will remain close to mid-point and likely to rise as some of the long Singapore dollar positions ahead of the policy announcement are closed," said Saktiandi Supaat, head of FX research at Maybank.

 
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