Singapore increased its currency band's appreciation slope for a second meeting, while Bank Indonesia Governor Perry Warjiyo resigned before his term ended and Destry Damayanti took over.
Economics & Markets··Morning
Singapore tightens through the exchange rate
The Monetary Authority of Singapore tightened policy for a second consecutive meeting, citing the risk that Middle East tensions keep energy prices elevated and increase inflation pressure. It raised slightly the appreciation slope of the Singapore dollar's policy band against a trade-weighted basket, while leaving the band's width and centre unchanged. Unlike most central banks, Singapore uses the exchange rate rather than a policy interest rate. Following an April move, the decision was presented as a pre-emptive adjustment against expected price pressure.[1]
Indonesia changes governor early
Indonesia's government announced that Bank Indonesia Governor Perry Warjiyo had resigned for personal reasons. His term was due to expire in 2028. President Prabowo Subianto accepted the resignation, and Senior Deputy Governor Destry Damayanti took over in an acting capacity. Warjiyo had worked at the institution since 1984, became governor in May 2018 and was reappointed in 2023. The announcement changed the institution's leadership about two years earlier than planned without announcing a change to the monetary-policy framework.[2]
Instrument continuity and leadership transition
The developments affect the central banks differently. Singapore tightened within its existing currency-band framework. Indonesia's announced change concerned the office directing policy rather than the instrument itself, with an internal deputy becoming acting governor. They are therefore not one regional policy turn: one is an instrument adjustment in response to inflation, and the other an early leadership transition. Both nevertheless gave markets new information about how the institutions will operate.[1], [2]
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