Monetary Authority of Singapore tightens policy as expected by slightly raising the rate of appreciation of the SGD NEER policy band, while it made no change to the width and level the band is centred
Says:
- In an appropriate position to respond effectively to any risk in medium-term price stability.
- Stands ready to curb excessive volatility in SGD NEER.
- MAS Core inflation will pick up and remain elevated over next few quarters.
- GDP growth will slow over the course of the year.
Context
The Monetary Authority of Singapore (MAS) has decided to tighten policy by slightly raising the rate of appreciation of the SGD NEER, aligning with market expectations. This move indicates the MAS's proactive stance on inflation, while the acknowledgment of anticipated slower GDP growth suggests potential headwinds for economic momentum. Traders should watch for implications on SGD volatility and potential impacts on USD/SGD as well as other currencies.
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