direct: The Singapore central bank has decided to ease monetary policy sharply, as the economy prepares for a state of deflation and a deep recession due to the Corona epidemic.
The Monetary Authority of Singapore said during the monetary policy statement published on its website today, Monday, that it will adopt an annual zero percent increase in the exchange rate starting from the prevailing level of nominal effective exchange rate, which currently stands below the reference midpoint.
Nominal effective exchange rate for the last three years – (Source: Singapore Monetary Authority)
The monetary easing measures taken by Singapore today are the largest since the 2009 financial crisis.
In violation of the familiar monetary policy Within central banks around the world, the Monetary Authority of Singapore adjusts its policy by three things, the curve, the reference midpoint and the nominal effective exchange rate.
And the Monetary Authority of Singapore reduced the country’s GDP estimates for the current year to a contraction ranging from 1 to 4 percent.
The Central Bank also decided to reduce the estimates of the consumer price index and the basic consumer price index to a range between (minus 1 to zero percent).
The bank said that, based on Ministry of Commerce and Industry figures released on March 26, Singapore’s economy contracted by 2.2 percent in the first quarter of 2020 on an annual basis after growing 1 percent in the previous quarter.
Whereas, on a quarterly basis, Singapore’s economy shrank sharply in the three months to March this year, amounting to 10.6 percent, after expanding 0.6 percent in the last quarter of 2019.
In Singapore there are 844 people with corona with three deaths, according to Johns Hopkins University.
By 10:01 am GMT, Singapore’s currency rose against its US counterpart by more than 0.1 percent, bringing the green paper down to 1.4253 Singapore dollars.