SINGAPORE (Mar 27): The benchmark Straits Times Index (STI) plunged 3.91% on Monday morning, after Singapore’s central bank took unprecedented easing steps Monday to support a trade-reliant economy being slammed by the coronavirus outbreak.

The Monetary Authority of Singapore, which uses the exchange rate as its main policy tool rather than a benchmark interest rate, lowered the midpoint of the currency band and reduced the slope to zero. That implies the central bank will allow for a weaker exchange rate to help support export-driven growth and to ward off deflationary threats.

The drop in the Index threatens to erase gains last week after Singapore unveiled a second stimulus package worth $48.4 billion to give the economy a shot in the arm against the Covid-19 pandemic.

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