Further money policy tightening may be unlikely due to banking sector turmoil
The central bank’s tightening is still unchanged amidst economic risks.
The UOB said its confidence level for further monetary policy tightening by the Monetary Authority of Singapore (MAS) may be lower due to the US and European banking sector turmoil.
“If systemic impact and contagion risks in the US and global financial sector continues to be contained by actions from the major central banks, then it will be reasonable to expect the MAS to tighten further, via a re-centring higher of the S$NEER,” said UOB.
The bank said the monetary policy moved further into a restrictive stance but it will be too early to call for a pause given the stickiness of core inflation, wage pressures due to tight labour market, and the domestic inflation.
UOB sees that the monetary policy statement will be released within 10 to 14 April but it would most likely be published on 14 April.