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Monetary Authority of Singapore sets zero appreciation path for Singdollar

Xinhua, April 14, 2016 Adjust font size:

The Monetary Authority of Singapore (MAS) decided to set the rate of appreciation of the Singapore dollars to zero percent with immediate effect as the Singapore economy is projected to expand at a more modest pace in 2016 and also in a bid to stabilize the inflation, according to a statement on Thursday.

MAS stressed that it is "not a policy to depreciate the domestic currency, and only removes the modest and gradual appreciation path of the S$NEER (Singapore dollar nominal effective exchange rate) policy band that was in place".

The width of the policy band and the level at which it is centered will be unchanged, the ministry added.

"This move to a neutral policy stance of zero percent appreciation follows the measured steps that MAS has taken to reduce the rate of appreciation of the policy band in January and October 2015 respectively," MAS said.

"The actual outcome of S$NEER movements over the six months since October 2015 has in fact been a zero percent appreciation compared to the preceding six-month period. The cumulative effects of past S$NEER movements and the new policy path will continue to ensure price stability over the medium term."

Since October last year, the Singapore dollar has appreciated over 5 percent as financial markets revised downwards their expectations of the U.S. Federal Reserve's pace of interest rate normalization. However, the average level of the S$NEER over the last six months as a whole has been unchanged compared to the six months prior to October 2015, MAS said. Enditem