The comments came on a day of wild swings in Asian markets, prompting several central banks in the region to inject liquidity into the financial system to calm the panic.
The MAS, which uses the exchange rate as its main policy tool instead of interest rates, said Feb 5 there was room within its exchange-rate band to accommodate some weakness in the local currency to counter the coronavirus outbreak. The bank’s next scheduled policy decision is in April.
The MAS has left more liquidity in the banking system via money market operations, and Singapore dollar interest rates have eased in tandem with global interest rates, the central bank said. The Singapore dollar’s nominal effective exchange rate has eased in an “orderly manner” within the bank’s policy band, in line with weakening economic conditions, the authority said.
