Singapore's central bank tightened monetary policy on Thursday, maintaining a modest and gradual appreciation of its currency but slightly increasing the slope of the band in which it is maintained.

The decision came as the government published preliminary data that showed third-quarter GDP fell at an annualised and seasonally adjusted rate of 19.8%.

 

“The balance of risks is weighted towards inflation going forward,” the Monetary Authority of Singapore (MAS) said in a statement following its semi-annual policy review.

 

“MAS will therefore continue with the policy of a modest and gradual appreciation of the Singapore dollar policy band in the period ahead. However, the slope of the band will be increased slightly, with no change to the level at which the band is centred.”

 

“The policy band will at the same time be widened slightly in view of the volatility across international financial markets.”

 

MAS sets policy by managing the Singapore dollar (SGD=) (SGD=D3) in a secret trade-weighted band against a basket of currencies, instead of setting interest rates.