SINGAPORE, Oct 14 (Reuters) - Singapore stuck to its tight monetary policy stance of allowing a 'modest and gradual' appreciation of the local dollar on Monday as expected, citing inflation from a tight labour market.
'Barring a significant deterioration in global demand conditions, the labour market will remain tight, and exert further upward pressures on MAS core inflation as firms pass on accumulated costs to consumer prices,' the Monetary Authority of Singapore (MAS) said in its half-yearly policy statement on Monday.
'MAS will therefore maintain its policy of a modest and gradual appreciation of the S$NEER (Singapore dollar) policy band. There will be no change to the slope of the policy band, and the level at which it is centred,' it said.
'The present width of the band is sufficient to accommodate temporary fluctuations in the S$NEER, and will be kept unchanged,' the central bank said.
The decision to keep policy tight came about despite advance gross domestic product (GDP) data that showed the economy contracted by 1.0 percent in the third quarter from the second quarter at an annualised and seasonally adjusted rate.
(Reporting by Kevin Lim; Editing by Paul Tait) Keywords: SINGAPORE POLICY/
(Kevin.Lim@thomsonreuters.com)(65)(6403 5663)(Reuters Messaging: firstname.lastname@example.org)
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