To control inflation, the Monetary Authority of Singapore seeks to steepen and widen the band on the local dollar, while continuing to seek a modest and gradual appreciation of the currency, reports the Straits Times.
The island nation's inflation is set to rise to 4% by end of the year and stay high in the first half of 2011.
"While inflation has been largely driven by higher car and commodity prices so far this year, other domestic sources of cost pressures have emerged amidst buoyant economic conditions," says the MAS in a statement obtained by the Times.
Estimates show that Singapore's gross domestic product shrank an annualised 19.8% in the third quarter from the previous three months after climbing a revised 27.3% in the April-to-June period, says the Times.
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