Singapore’s central bank tightens monetary policy

Rustam Azmi | Getty Images

A General View of Marina Bay Sand at Sunrise on September 20, 2016 in Singapore.

Singapore’s central bank tightened monetary policy for the first time in six years on Friday, saying the city-state’s economy should remain on a steady expansion path in 2018, even as it acknowledged risks from a possible escalation of U.S.-China trade tensions.

The Monetary Authority of Singapore (MAS) said it would slightly increase the slope of the Singapore dollar’s policy band from zero percent previously, while keeping the width and mid-point of the band unchanged.

Preliminary data also showed on Friday that Singapore’s economy grew more than expected in the first quarter from the previous quarter on an annualized basis, on the back of continued growth in the manufacturing sector,

The economy expanded 1.4 percent in the January-March period on an annualized and seasonally adjusted basis, the Ministry of Trade and Industry said on Friday in a statement.

Gross domestic product was expected to have grown 1.0 percent in annualized terms in January-March from the previous three months, according to the median forecast of a Reuters poll of economists.

In the fourth quarter, GDP grew 2.1 percent on an annualized basis from the previous quarter. Growth for the 2017 full year was 3.6 percent, the largest increase since 2014.

GDP in the first quarter grew 4.3 percent from a year earlier, matching forecasts in the Reuters poll. In the fourth quarter, Singapore’s economy grew 3.6 percent from the year earlier.