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SINGAPORE: Singapore on Friday loosened its monetary policy for the first time in more than four years, citing lower domestic growth, falling inflation, and the stress on global financial markets.
The move by the Monetary Authority of Singapore (MAS) – the city-state’s de facto central bank - followed coordinated interest rate cuts by the world's leading central banks earlier this week in an effort to calm markets.
The MAS conducts monetary policy through the local currency rather than by setting interest rates.
The Singapore dollar is traded against a basket of currencies of its major trading partners within an undisclosed band known as the nominal effective exchange rate (NEER).
In a statement, MAS said it had maintained the policy of a modest and gradual appreciation of the NEER policy band since April 2004 but is shifting its policy to zero per cent appreciation.
It is hoped the move will slow the rise of the Singapore dollar to support Singapore's export-driven economy.
- AFP/yb
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