The Monetary Authority of Singapore (MAS) says it will adjust its monetary policy and allow the Singapore dollar to appreciate at a slower pace.

As part of its ongoing economic surveillance, MAS assessed that it is appropriate to adjust the prevailing monetary policy stance.

The central bank said it would continue with the policy of a modest and gradual appreciation of the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) policy band.

"However, the slope of the policy band will be reduced, with no change to width and the level at which it is centred," MAS said in its Policy statement released Wednesday.

It also said this measured adjustment to the policy stance is consistent with the more benign inflation outlook in 2015 and appropriate for ensuring medium-term price stability in the economy.

Over the last three months, the S$NEER has generally fluctuated around the middle of the policy band.

The depreciation of the S$ against the broad-based strength of the US dollar was partly offset by the appreciation of the S$ against the Malaysian ringgit, euro, and Japanese yen.

Thus, movements in the S$NEER have been relatively muted compared to bilateral S$ movements against the major currencies.

The three-month S$ SIBOR (Singapore Interbank Offered Rate) increased slightly from 0.41 percent at end-September 2014 to 0.46 percent at end-December.

It rose further to 0.65 per cent in mid-January 2015, and has since stayed at around this level.

MAS said it would continue to be vigilant over developments in the external environment and their impact on the domestic economy, and stands ready to curb sharp movements in the S$NEER.