Logo of Phnom Penh Post newspaper Phnom Penh Post - Singapore eases monetary policy as virus slams economy

Singapore eases monetary policy as virus slams economy

Content image - Phnom Penh Post
The Monetary Authority of Singapore (MAS) on Monday eased monetary policy as the city-state heads for a deep recession due to the coronavirus pandemic. AFP

Singapore eases monetary policy as virus slams economy

Singapore's central bank on Monday eased monetary policy as the city-state, seen as a bellwether for the health of global trade, heads for a deep recession due to the coronavirus pandemic.

The easing echoes moves made by other countries and comes after data last week showed the city-state suffered its sharpest contraction in the first quarter since the global financial crisis.

The Monetary Authority of Singapore (MAS) said it had flattened the slope of the band at which the local dollar is allowed to move against a basket of currencies of its major trading partners – effectively weakening the local unit.

Instead of using interest rates, trade-reliant Singapore manages monetary policy by letting the local dollar rise or fall against a currency basket of its trading partners.

“Major uncertainty remains. The recovery in the global economy will depend on the epidemiological course of the pandemic and the efficacy of policy responses,” the central bank said.

MAS was supposed to issue its next policy statement in April but brought it forward as the country reels from the economic impact of the virus.

The financial hub is one of the world’s most open economies, and is usually hit hardest and earliest during any global shock.

Gross domestic product (GDP) shrank by 2.2 per cent in the first quarter compared with the previous year – the worst decline since the 2009 financial crisis, according to advance estimates released last week by the trade ministry.

The ministry has downgraded its growth forecast, projecting that GDP will fall by up to four per cent this year.

With global demand hammered by business closures, a halt in air travel and other measures to contain the virus, Singapore’s easing is more to reflect the current economic climate than to support exports, said CIMB Private Banking regional economist Song Seng Wun.

“You cannot have a strong Singapore dollar when regional economies and the global economy are in deep recession,” he told AFP.


  • 12th Cambodia int’l film festival to see return of Hollywood star

    Phnom Penh is set to come alive with the magic of cinema as the highly anticipated 12th Cambodia International Film Festival (CIFF) takes centre stage. Boasting an impressive line-up of 188 films from 23 countries, including captivating shorts, feature films, documentaries and animation, the festival promises an

  • Brawl marrs football final as Indonesian take gold in seven goal thriller

    The Indonesian men's U22 men national football team were crowned champions of the 32nd SEA Games in Cambodia, defeating Thailand 5-2 in extra time on May 16 at Olympic National Stadium in Phnom Penh. The match was marred by an ugly incident that occured in the 91

  • Bareknuckle champion wants Kun Khmer fighter

    Dave Leduc, who is the current openweight Lethwei boxing champion in Myanmar, has announced that he will travel to Cambodia this year to challenge SEA Games gold medallist Prum Samnang any time that is convenient, after their planned match later this month in Slovakia was

  • Candlelight Party disqualified from July general election

    The National Election Committee (NEC) has disqualified the Candlelight Party (CP) from contesting the upcoming general election, citing a lack of valid documentation. NEC spokesman Khorn Keomono said the CP failed to fulfil one of the three main requirements: including original documentation proving their registration

  • 1.4 billion dollar Phnom Penh-Bavet expressway due in four years

    The Government, through the Ministry of Public Works and Transport, has officially signed a public-private partnership agreement with a private company for the construction of a Phnom Penh-Bavet Expressway project that will connect the capital to Svay Rieng province. The budget for the project is

  • New Law on Taxation comes into effect

    Cambodia has enacted the eagerly-awaited new Law on Taxation, which aims to improve the national tax regime’s compliance with present and future international standards and economic conditions; encourage accountability, effectiveness and transparency in the collection process; and promote investment in the Kingdom. King Norodom