WASHINGTON, USA - Monetary policy in Singapore was 'broadly appropriate' and the authorities should keep rates at present levels until an economic recovery was clearly under way, the International Monetary Fund said on Monday.

'Further along the recovery path, a tightening stance would be warranted to safeguard price stability, through targeting a trend appreciation of the nominal effective exchange rate,' the IMF said in its annual review of Singapore's economy.

Singapore's central bank manages monetary policy by adjusting the Singapore dollar against a secret basket of trade-weighted currencies.

Its next review of monetary policy is in October, when many analysts believe the central bank will keep its accommodative monetary policy despite stronger-than-expected economic performance in the second quarter.

The Fund said staff assessment of the value of the Singapore dollar showed the currency 'appears to be somewhat weaker than its medium-term equilibrium level.'

'The real effective exchange rate would likely strengthen, in line with fundamentals, once a global recovery takes hold,' the IMF added.