Singapore’s government is set to deliver a supplementary budget on March 26. Separately the Monetary Authority of Singapore (MAS) will now deliver its next policy decision on March 30, strategists at TD Securities apprise.
“We expect more fiscal stimulus to be accompanied by a re-centering of the SGD NEER band and shift to a neutral stance from what we believe was a 0.5% slope previously.”
“SGD is currently around 0.5% below the midpoint of its SGD NEER band. If we are correct in our view of a recenter and shift to neutral slope, we see scope for more depreciation within the band.”
“USD/SGD is likely to move higher. It is notable that markets have moved some way to price such an outcome but we see scope for more SGD NEER depreciation both ahead and after the MAS decision.”
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