SINGAPORE, April 14 (Reuters) - Singapore's central bank tightened its monetary policy on Thursday, in a widely anticipated decision, saying the move will slow the inflation momentum as the city state ramps up its battle against soaring consumer prices.
The Monetary Authority of Singapore (MAS) said it would re-center the mid-point of the exchange rate policy band known as the Nominal Effective Exchange Rate, or S$NEER, at the prevailing level of the S$NEER. It will also increase slightly the rate of appreciation of the policy band. There will be no change to the width of the policy band. The MAS manages monetary policy through exchange rate settings, rather than interest rates, because trade flows dwarf its economy, letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed band.
It adjusts its policy via three levers: the slope, mid-point and width of the policy band.
All 16 economists polled by Reuters expected the MAS to tighten but they were divided on which parameters it would change. (Reporting by Aradhana Aravindan, Anshuman Daga, Chen Lin and Joe Brock in Singapore Editing by Shri Navaratnam)
