Singapore: MAS increased its FX policy slope “slightly” – Nomura

Analysts at Nomura note that the Monetary Authority of Singapore (MAS) has further increased the slope of S$NEER appreciation “slightly”, which Nomura estimate to be an 0.5% increase to a 1.0% annualised pace of appreciation.

Key Quotes

“The MAS maintained the current S$NEER policy band width and midpoint. Given the policy shift was somewhat in line with consensus (twelve out of 21 analysts; Bloomberg, 10 October) and our view, the immediate USD/SGD and S$NEER reaction was limited.”

“Specifically on the policy statement, the MAS provided a benign growth outlook, highlighting that the “Singapore economy is likely to remain on its steady expansion path in the quarters ahead, keeping output slightly above potential.”

“Given the overall benign outlook from the MAS, we believe the policy door has been left open. A further “slight” tightening is possible at the next policy meeting, given the MAS has highlighted a positive output gap and some underlying inflation pressures (though expected to ease below 2% over the medium term). However, we believe that, if global conditions were to worsen significantly, the MAS could pause or even ease if necessary.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.