(Bloomberg) -- Singapore’s central bank eased monetary policy Monday to support an economy on track for its worst recession in years due to the rapid global spread of the coronavirus.
The Monetary Authority of Singapore, which uses the exchange rate as its main policy tool rather than a benchmark interest rate, reduced the slope of the currency band to zero starting at the prevailing level of the nominal effective exchange rate of the Singapore dollar.
All 16 economists in a Bloomberg survey projected the MAS would reduce the slope to zero and recenter the policy band.
The MAS’s move comes days after Deputy Prime Minister Heng Swee Keat unveiled a second fiscal support package of S$48 billion ($33.6 billion) for businesses and consumers, bringing the total stimulus delivered this year to about 11% of gross domestic product.
The MAS guides the local dollar against a basket of currencies and adjusts the pace of appreciation or depreciation by changing the slope, width and center of the currency band. It doesn’t disclose details of the basket, the band or the pace of appreciation or depreciation.
The policy decision was brought forward from its typical April timing, and follows an easing in October.
©2020 Bloomberg L.P.
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