What every Singaporean should watch out for after the technical recession

MAS is expected to ease the exchange rate policy.

According to DBS, with Singapore likely having entered a technical recession, some policy easing is likely.

Here' smore from DBS:

Specifically, we expect the MAS to ease the exchange rate policy by adopting a more gradual pace of NEER appreciation (at the policy review) expected sometime in the next two weeks. The slope of the NEER policy band is expected to be lowered to 2%, from an estimated 3% previously.

The policy of tightening the inflow of low wage foreign labour may also be reviewed. Note that these foreign workers typically fulfil jobs shun by Singaporeans and are an integral part of our labour force.

The latest occasional paper issued by the Ministry of Trade and Industry has already laid out clearly the challenges facing the economy if the tight foreign labour policy remains in place.

Earlier hikes in foreign workers’ levies could be unwound should economic conditions deteriorate further. This would provide some breathing space for companies struggling with high labour cost and falling revenue.

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