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THE USD/SGD (US dollar/Singapore dollar) rebounded to a high of 1.3549 after the Monetary Authority of Singapore (MAS) maintained its neutral policy stance.
The currency pair had fallen to a low of 1.3508 before the announcement. SGD interest rates headed higher in reaction to the MAS's decision to keep to its neutral stance.
"As the market was pricing in a hawkish outlook, the perceived dovishness of the policy statement nudged USD/SGD forward points and shorter-term SGD swaps rates up. Overall, the policy review has the making of a "buy the rumour, sell the event" outcome," DBS Group Research said on Friday.
Earlier, the central bank said that it was keeping its Singdollar policy unchanged, maintaining the rate of appreciation of the S$NEER policy band at zero per cent, with no change to the width of the policy band and the level at which it is centred.