Friday, April 13, 2012

Singapore tightens monetary policy, economy grows

Singapore's central bank tightened monetary policy slightly on Friday and reiterated it would let the Singapore dollar appreciate at a "modest and gradual" pace.

The Monetary Authority of Singapore, saying the slope of its currency policy band would be increased slightly, also revised its forecast for full-year all-items inflation to 3.5 to 4.5% from 2.5 to 3.5%.

Sixteen of 17 forecasters polled by Reuters had expected the MAS to stand pat on policy, while one saw a 50% chance it would let the currency strengthen at a faster pace.

Singapore manages monetary policy by letting the its dollar rise or fall in a undisclosed band against a secret trade-weighted basket of currencies of its main trading partners.

Singapore also said its economy grew 9.9% in the first quarter from the last three months of 2011, meaning it avoided a technical recession. The economy grew 1.6% in the first quarter from a year earlier.

The median forecast of economists polled by Reuters was for growth of 7% on an annualised and seasonally adjusted quarter-on-quarter basis and a year-on-year expansion of 1.1%.

Singapore reiterated its forecast for 2012 GDP growth of 1 to 3%.

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