Singapore’s Central Bank Eases Monetary Policy

Singapore’s Central Bank Eases Monetary PolicyFor the second time in the year, the Monetary Authority of Singapore, the central bank, added some ease to the monetary policy. The economy closely missed a technical recession and the financial agency said that continuing weakness in the global growth prospects will create "headwinds" in the months ahead.

The Monetary Authority of Singapore uses the currency as its key policy tool rather than interest rates. On Wednesday it said it will slightly reduce the rapidity of appreciation of the local dollar against the value of its trading partners. In a statement the trade ministry said that there was an unexpected 0.1 percent growth in the GDP or the Gross domestic product in the recent quarter till September compared to the earlier quarter. In the previous quarter the GDP shrank a revised 2.5 percent.

The island nation's economy depends highly on its exports, which is again vulnerable to the shifts in demand of products globally.

The central bank said, "The Singapore economy is projected to expand at a modest pace in 2015 and 2016, with growth slightly weaker than earlier envisaged. The subdued global growth will exert a drag on the external-oriented sectors in Singapore in the quarters ahead."