The International Monetary Fund holds the viewpoint that once the economy recovers from its worst recession since independence in 1965, Singapore should resume to a policy of allowing the currency to strengthen.

It was specified by the Washington-based lender, via a statement on its Web site, that in order to protect price stability, a tightening stance would be warranted through targeting a trend appreciation, further along the recovery path. Presently, Singapore's monetary policy is broadly apposite.

In April, it was forwarded by the Monetary Authority of Singapore, which manages inflation exclusively through its exchange rate, that the trading range for the island's dollar would be adjusted by it, a move economists feel was a de facto devaluation of the currency. It will be in October that the central bank will next review its policy.

Irene Cheung, director of local-markets trading at ABN Amro Bank NV in Singapore, said: "Given that we are at an early phase of the global economic recovery, it makes sense for the MAS to keep its neutral policy until next year's review. If things improve, the Singapore dollar can still trade at a stronger level within its currency band."

A rise by 0.3% was seen in the Singapore dollar to S$1.4399, against the U. S. currency at 11:55 a. m. local time, paring yesterday's loss. Since the end of June, the Singapore dollar has gained 0.5%.