Singapore refrained from easing monetary policy further after economic growth last quarter beat analysts’ estimates.
The Singaporean dollar climbed 0.6 percent to S$1.3636 against the US dollar as of 1:12pm yesterday, set for the biggest gain since April 1. It had weakened 6.4 percent versus the greenback in the previous six months amid a global uptick for the US dollar.
The Monetary Authority of Singapore yesterday said it would “maintain the policy of a modest and gradual appreciation” without adjusting the pace of its currency’s moves.
GDP rose an annualized 1.1 percent last quarter from the previous quarter, Singapore’s Ministry of Trade and Industry said. The median estimate in a Bloomberg News survey was 0.2 percent.
A faltering growth outlook, coupled with the nation’s longest disinflation streak since the 2008 global financial crisis, had put pressure on the monetary authority to add to an unexpected January policy easing.
While cheaper crude oil prices have contributed to falling consumer prices, officials have said Singapore’s economy stands to benefit on the whole as a net oil importer.
The central bank, which uses the currency rather than interest rates to manage inflation, reduced the pace of the Singaporean dollar’s appreciation against those of its trade partners in an unscheduled decision on Jan. 28, after growth sagged last year to its weakest showing in five years.
The economy expanded 2.1 percent annually in the first quarter, matching the pace in the previous three months, the Ministry of Trade and Industry said yesterday. The median estimate in a Bloomberg survey was for a 1.7 percent gain.
Singapore’s manufacturing shrank an annualized 2.3 percent in the first quarter from the previous three months, compared with a 2.5 percent contraction in the fourth quarter of last year. Construction expanded 13.8 percent, while services fell 0.4 percent.
Yesterday’s data are advance estimates computed largely from figures in the first two months of the quarter and might be revised later, the ministry said.
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