SINGAPORE (Feb 5): Singapore’s central bank is keeping its monetary policy stance remains unchanged, amid worries over the weakening of economic conditions as a result of the novel coronavirus outbreak.
Singapore on Tuesday saw a spike in the number of confirmed cases of the coronavirus, including its first cases of local transmission. Six new confirmed cases were reported, bringing the total number of infected patients here to 24. Four out of six new infected patients had not travelled to China.
In a statement on Wednesday in response to media queries, the Monetary Authority of Singapore (MAS) said there is “sufficient room” within the policy band to accommodate an easing of the Singapore Dollar Nominal Effective Exchange Rate (S$NEER).
MAS has reduced slightly the rate of appreciation of the S$NEER policy band in October last year. It notes that the currency gauge has been fluctuating near the upper bound of the policy band since then.
“There is therefore sufficient room in the band for the S$NEER to ease in line with any weakness in the Singapore economy in the coming months,” MAS said.
MAS in October last year eased its monetary policy for the first time in three years. The slope of the S$NEER was reduced slightly, but the width of the policy band and the level at which it is centred remained unchanged.
The S$NEER is the trade-weighted basket of currencies against the Singapore dollar, which has been a key policy tool for MAS.
Leaders in Singapore have warned that the coronavirus, which originated from Wuhan in central China, is likely to hurt its economic growth this year. Already, the affluent city state in 2019 had recorded its lowest growth rate in a decade.
The central bank said it is “monitoring economic developments closely”. The next policy review, it added, will be in April as scheduled.
Following the MAS announcement on Wednesday, the Singapore dollar has fallen more than 0.5% against the greenback – slipping to a four-month low of $1.3784 to the US dollar.