Singapore Central Bank unexpectedly eases policy
Singapore’s central bank unexpectedly eased its currency policy on Thursday as it expects the pace of economic growth to ease more than expected.
In addition, the Monetary Authority of Singapore expects a milder pickup in core inflation.
Compared with the central bank’s expectations at its last monetary policy review in October, the economy is now projected to expand at a more modest pace this year due in part to a less favorable external environment. However, the MAS kept its GDP growth estimate unchanged at 1% to 3%.
In a separate statement, Singapore’s government said gross domestic product growth was flat in the first quarter. There was no GDP change for the three months to the end of March on a seasonally adjusted and annualized basis compared with the quarter before, according to advance estimates by the Ministry of Trade and Industry.
That followed a 6.2% on-quarter increase in the fourth quarter of last year, which matched the forecast of economists polled by The Wall Street Journal.
Measured year-over-year, the island nation’s economy is estimated to have expanded 1.8% in the first quarter, the same pace as in the previous three months, the government data showed.
The reported GDP was in line with analyst estimates, but the central bank’s decision caught most analysts by surprise. Nine of 11 economists polled by The Wall Street Journal had expected the central bank to stand pat.
The change in the policy stance is likely “in anticipation of growth being weaker. MAS has been accused of being behind the curve in the past. Perhaps this time, it’s trying to stay ahead of the curve,” said Song Seng Wun, an economist at CIMB Private Bank in Singapore.
Standard Chartered Bank’s Jeff Ng said he was surprised at the easing move as economic growth in the first quarter was above his estimates. Several economists had predicted a contraction in the economy in the first quarter.
nice ferris wheel..
what exactly are they easing?
growth for one..