MAS seen to refrain from easing monetary policy in October

Taming inflation a key priority.

According to a report by Bloomberg, the Monetary Authority of Singapore will probably refrain from easing monetary policy this month as taming inflation takes priority over reviving economic growth.

The central bank, which uses the exchange rate rather than borrowing costs as its main policy tool, will keep the current stance of a “modest and gradual” appreciation in the Singapore dollar and refrain from adjusting the trading band on Oct. 14, according to 19 of 21 analysts surveyed by Bloomberg News. The economy probably contracted last quarter, another survey showed.

Singapore is grappling with persistent price risks even as Asia’s growth outlook falters with the World Bank and Asian Development Bank cutting economic forecasts this month. The island has resisted any monetary easing since October 2011 as a tight labor market and persistent demand for homes spurs inflation risks.

Read full report here.