Tuesday, the Monetary Authority said in a report it is re-centering the exchange rate policy band to the prevailing level of the nominal effective exchange rate or the S$NEER, and holding the width of the band unchanged. Moreover, the central bank said the S$NEER policy band would have a zero percent appreciation.

Reports suggest that the action tantamount to a devaluation of the currency by about 1.7%. The decision was taken amid easing external and domestic inflationary pressures, and a deterioration in the global economic environment.

At the same time, the Monetary Authority of Singapore said there was no reason for undue weakening of the Singapore dollar, as the country had sound fundamentals and a resilient financial system.

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