Yesterday, MAS released their monetary policy statement for the first half of this year. In a double move, it has re-centred its policy band at the Singapore dollar’s current level, and allowed for a modest and gradual appreciation of the unit. This marks a change from the no-appreciation policy in place since October 2008 and has taken place on the back of improving economic outlook and increasing inflation
Singapore’s GDP growth forecast for 2010 has been revised upwards to between 7% and 9%, from 4.5% and 6.5% while overall CPI inflation in 2010 is projected to be between 2.5% and 3.5%, slightly higher than the 2-3% forecast earlier..
Analysts expect an appreciation in the S$ at a rate of 2 per cent a year.