SINGAPORE (Thomson Financial) – The Monetary Authority of Singapore (MAS) said domestic inflationary pressures remain well-contained and do not require a change in its monetary policy.
‘Abstracting from the one-off effects of the goods and services tax (GST) hike (from 5 percent to 7 percent), underlying inflationary pressures remain generally well-contained for the current advanced stage of the business cycle,’ MAS said in a statement.
The Singapore government continues to expect inflation to come in within its 1-2 percent target for this year despite a recent spike in consumer prices. The consumer price index rose an annual 2.6 percent in July as the GST hike took effect.
‘MAS’ monetary policy stance of a modest and gradual appreciation of the Singapore dollar nominal effective exchange rate (NEER) policy band remains in place. MAS will continue to monitor closely the price and cost developments in the economy and review the policy stance in October 2007,’ MAS said.
The MAS manages the Singapore dollar NEER against a basket of trade-weighted currencies.
Original article here.
With the strong (and overly strict?) government in place, Singapore dollar is always my favorite when considering some long term low risk way of parking some of my savings. One of the big catch to me is that the monetary policy of Singapore is centered around the exchange and the MAS steps in to curb the volatility.
And here is another idea that suggest Singapore Dollar May Fund Carry trades.