Export competitiveness at risk from unchanged MAS monetary stance

The strong SGD is a threat.

Singapore's exports rebounded magnificently in March, but this unexpectedly good performance is under threat from the MAS' unchanged monetary policy.

UOB noted that the central bank's decision to keep its stance of a modest and gradual appreciation of the S$NEER policy band could hurt export competitiveness in an era of generally looser monetary policy.

"The market disappointment on the unchanged monetary decision by the MAS on 14 Apr, as opposed to expectations of a looser stance, saw the SGD NEER strengthening quite substantially over the past few days. Going ahead, a relatively stronger SGD in the current environment where global central banks are adopting looser, rather than tighter, monetary stance, may see weaker export competitiveness for Singapore in the months ahead," stated UOB.