Singapore’s monetary policy likely to normalise in April: analyst

Singapore’s central bank may reduce the S$NEER slope by 50 basis points

Singapore’s monetary policy is expected to normalise in as early as April 2024, according to a report by the UOB Global Economics and Markets Research.

The Monetary Authority of Singapore (MAS) is expected to slightly reduce the S$NEER slope by 50 basis points (bp) to an estimated 1% p.a. at this time.

A milder appreciation of the S$NEER via a gentler slope could ease concerns over export competitiveness and support a “narrowing” of the negative output gap towards H2 2024, it added.

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Full-year inflation is also projected to remain above the historical average of 1.8%. Overall, the Singapore economy is expected to strengthen in 2024, with growth becoming more broad-based, said UOB.

Imported inflation, meanwhile, is sighted to continue easing on an appreciating S$NEER and progressive disinflation to Singapore’s key trading partners, particularly China.