Singapore currency to continue modest and gradual appreciation: gov't

14:43, October 14, 2010      

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Singapore's central bank will continue its monetary policy, or modest and gradual appreciation of its currency, local media reported Thursday.

In its twice-yearly policy statement, the Monetary Authority of Singapore (MAS) said it will increase the slope of its policy band slightly, local TV broadcaster Channelnewsasia reported Thursday.

However there will be no change to the level at which the band is centered.

MAS says the policy band will also be widened slightly in view of the volatility across international financial markets.

The broadcaster quoted MAS as saying that this policy stance will remain supportive of economic growth while seeking to cap inflation.

"The Singapore economy will continue to expand, although at a slower and more sustainable pace after recovering robustly from the downturn" the MAS noted in its report.

At the same time, the MAS cautioned that domestic cost pressures are rising, with the balance of risks weighted towards inflation going forward.

"Even as base effects dissipate, the build-up in sequential price increases will cause the headline CPI inflation rate to rise to around 4 percent by the end of 2010 and stay high in the first half of 2011 before moderating" said the MAS report.

To ensure medium-term price stability, MAS is targeting to cap CPI inflation at 2-3 percent in 2011, down from 2.5-3 percent this year.



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