Singapore’s central bank said its exchange rate-based monetary policy stance remains appropriate and that the currency has room to ease within its current settings amid weakening economic conditions due to the outbreak of the coronavirus in China.
Singapore, which recorded its lowest growth rate in a decade last year, has warned that China’s coronavirus epidemic which has spread to the island nation will hurt its growth this year.
But the Monetary Authority Of Singapore, which eased policy for the first time in three years at its last meeting in October, said on Wednesday its currency gauge had been trading near the top of its policy band and therefore has room to depreciate to accommodate any economic hit.
There is sufficient room within the policy band to accommodate an easing of the Singapore Dollar Nominal Effective Exchange Rate in line with the weakening of economic conditions as a result of the outbreak of the 2019 novel coronavirus in China and other countries, including Singapore.
It was monitoring economic developments closely and its next policy review would be in April as scheduled.
The Singapore dollar hit its weakest against its U.S. counterpart since October, losing more than 0.5% against greenback after the statement was issued.