Singapore’s central bank kept its monetary policy setting unchanged for the third consecutive month. Despite estimates that inflation will decline later this year, officials claim that a relaxation may occur later this year.
In a statement issued on Monday, the Monetary Authority of Singapore (MAS) maintained the currency band’s slope, width, and centre. It aims to keep the local dollar on an appreciating path, which will help prevent imported inflation.
The statement read, “Core inflation is likely to remain elevated in the earlier part of the year. However, it should decline gradually and step down by the fourth quarter before falling further next year.” It further stated that reduced import costs and a slower rate of increase in local costs should support the moderating trend in inflation.
Despite relatively tight labour markets and strong house-price growth, Singapore’s economic growth has shown signs of resilience since the last review in October. However, it has increased the risk of ongoing price pressures and the Middle East crisis, which could drive up energy prices.
After peaking at 5.5% early last year, core inflation slowed in December to 3.3%.
