Singapore central bank left its monetary policy unchanged as the current stance is assessed to be consistent with benign inflation outlook and moderate growth prospects.

The Monetary Authority of Singapore on Tuesday maintained the policy of a modest and gradual appreciation of the S$NEER policy band.

There will be no change to the slope and width of the policy band, and the level at which it is centered.

At an unscheduled meeting in January, the bank loosened its monetary policy, citing lower inflation outlook. It reduced the slope of the policy band.

Since January, the Singapore dollar fluctuated within the lower half of the policy band. It weakened over February to mid-March before strengthening more recently.

The bank said today the current stance is also appropriate to ensure medium-term price stability.

Instead of interest rates, the MAS applies the exchange rate against a basket of currencies within an undisclosed band as its monetary policy tool. The bank holds monetary policy twice a year, in April and October.

Preliminary figures released today by the Ministry of Trade and Industry showed that growth in the city-state economy held steady at 2.1 percent in the first quarter.

The economy is on the track to expand at 2-4 percent this year, and there is no change to inflation forecasts, the central bank said. Nonetheless, beyond the near term, underlying cost and price pressures could pick up, given the tightness in the labor market.

For 2015, inflation is projected at -0.5 to 0.5 percent and core inflation is expected to come in at 0.5-1.5 percent, unchanged from the January monetary policy statement.

The bank sees the risk of underlying cost pressures mounting and penetrating it to consumer prices over the medium-term.

Concerns about the medium term inflation outlook mean that the MAS is likely to leave policy unchanged for the foreseeable future, Daniel Martin, a senior Asia economist at Capital Economics said.

The most important decisions that will affect monetary conditions in Singapore over the coming years will not be made by the MAS, but by the US Fed, he noted.