SGD Falls Following Optimistic CPI Announcement
• Monetary Authority of Singapore Announces Lower than Expected CPI
• Singapore Dollar Weakens Following Announcement
The Singapore Dollar weakened after the Monetary Authority of Singapore announced that CPI had slowed to 0.10 percent in October from 0.60 percent in September, falling short of analysts’ expectations of 0.60 percent as a result of fluctuations in car Certificate of Entitlement (COE) premiums and declines in oil-related items. The central bank argued that the downgrades stem from a decrease in private road transport of 5.6 percent, following a similar fall of 2.8 percent in September of this year. Prices of oil-related items also continued to fall, further suppressing petrol pump prices by 2.1 percent in October, given the recent weakness in global oil prices. Depressed food prices also attributed to falling CPI statistics. Policymakers projected core inflation to remain stable at an average of 2 to 2.5 percent for the remainder of 2014 and 2 to 3 percent in early 2015. Despite the downward trajectory of inflationary statistics, the SGD fell sharply shortly after the announcement.
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