MAS eases monetary policy, flattens S$ policy band

SINGAPORE'S central bank surprised the market on Thursday morning with an easing stroke, moving to a neutral policy stance of zero per cent appreciation of the S$NEER (Singapore dollar nominal effective exchange rate) band.

"This is not a policy to depreciate the domestic currency, and only removes the modest and gradual appreciation path of the S$NEER policy band that was in place," said the Monetary Authority of Singapore in its half-yearly policy statement.

The width of the policy band and the level at which it is centred will be unchanged.

"The actual outcome of S$NEER movements over the six months since October 2015 has in fact been a zero percent appreciation compared to the preceding six-month period. The cumulative effects of past S$NEER movements and the new policy path will continue to ensure price stability over the medium term," added the central bank.

Prior to Thursday morning's half-yearly monetary policy statement, the bulk of economists had expected MAS to leave its monetary policy stance unchanged.