The Bank of Singapore unexpectedly kept its monetary policy unchanged. It expects the demand boom brought about by global energy constraints and artificial intelligence to cool down next year. The Monetary Authority of Singapore does not use interest rates, but exchange rates as the main policy tool. The bank issued a statement on Wednesday to keep the slope, width and midpoint of the exchange rate policy range unchanged. This is the first time that the tightening has been suspended after many consecutive rounds of austerity at the April and July meetings. Of the 20 economists surveyed by the media, only 3 predicted the resolution. Most expected the HKMA to raise the slope of the policy range; most respondents also expected the central bank to maintain hawkish tendencies. After the announcement of the resolution which exceeded expectations, the Singapore dollar fell 0.1% to SGD 1.28. Khoon Goh, head of Asian research at ANZ Bank, said, “The effects of two consecutive rounds of austerity in April and July are still being transmitted, so the central bank believes there is no need for further tightening at this stage. But that doesn't mean the end of the austerity cycle. If the risk of rising inflation is realized next year, the HKMA may tighten its policy again.” The Monetary Authority of Singapore narrowed this year's core inflation forecast range to 1.5%-2%. The upper limit forecast for the July meeting was 2.5%; overall inflation is expected to be around 2%.

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