Singapore on April 14 announced that the country will loosen its monetary policy in an attempt to stimulate the country’s sluggish economy which has been forecast for slow growth this year.

The Monetary Authority of Singapore (MAS) has informed the country’s monetary stance measures due to subdued global demand, particularly from China, a major market for the country.

Accordingly, the MAS has shifted to a centralisation policy and kept the Singapore Dollar Nominal Effective Exchange Rate (NEER) at zero percent, where the country’s previous policy was “modest and gradual”.

The Monetary Authority of Singapore (Source: straitstimes)

The country will use monetary policy, instead of interest rates, as a tool to adjust the economy, and control the domestic currency with foreign partners’ currency baskets to boost the economy.

The MAS first adjusted its monetary policy to zero percent in October 2008 when the country’s economy was facing recession due to the impacts of the global financial crisis.

The authority also reduced the domestic currency’s value in January and again in October 2015. However, the MAS assert that the new policy is not a devaluation plan.

The Singaporean government has forecast that the country’s economy will grow from 1 to 3 percent this year.

(Source: VNA)