Economics
Singapore's Central Bank Is Being Put to the Test
- MAS widely expected to keep policy unchanged in meeting Friday
- Some analysts say economic downturn may force action in 2017
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Singapore’s central bank is being put to the test as it navigates a sluggish economy and falling consumer prices with a policy tool focused on the currency.
Unlike most advanced nations, and because of its heavy dependence on exports, Singapore targets the exchange rate instead of interest rates to maintain price stability. Analysts are looking to the Monetary Authority of Singapore on Friday to provide any clues on whether it prefers a weaker local dollar to bolster an economy that probably didn’t grow at all in the third quarter.