, Singapore
232 views

MAS likely to tighten monetary policy anew in October after record-high inflation in May: analysts

Experts expert MAS to steepen the S$NEER gradient to 2%.

Following the record-high core inflation in May of 3.6%, experts believe that the Monetary Authority of Singapore (MAS) will tighten anew its monetary policy in October.

"We expect MAS to further steepen the S$NEER gradient at the Oct 2022 monetary policy meeting, while leaving the width of the band and the level at which it is centred unchanged," said UOB, adding that the slope may be raised to 2%. 

This was echoed by ING, saying that the possibility of additional tightening is likely if prices stay elevated in mid-Q3.

"Energy and food prices could very well stay pricey given current indications as countries resort to protectionist policies at the expense of global supply," ING added.

UOB said that the tightening may also come ahead of October "especially if core inflation accelerates well above 4% in the next few months."

Maybank, on the other hand, thinks MAS will maintain its current appreciation stance of 1.5% because it believes core inflation will peak in the third quarter.

"Commodity prices have been slipping from their recent peaks, including food prices. The relaxation of some export bans on palm oil in Indonesia and fertiliser in Russia will help ease food price pressures. The global growth slowdown and monetary tightening are leading to demand destruction and cooling commodity prices," Maybank commented.

Given the record-high core inflation, UOB and Maybank revised their full-year estimate to 4.0%, exceeding the official forecast range of 2.5% to 3.5%.

READ MORE: Inflation to increase ‘by a bigger magnitude’ in coming months: analysts 

Follow the link for more news on

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Top News

SIT, DNV ink 3-year partnership on maritime decarbonization and digitalization
The parties will cooperate in three key areas.   The Singapore Institute of Technology (SIT) has joined hands with a maritime advisor, DNV, to advance net-zero ambitions in the Lion City’s maritime sector.

Exclusives

Where to invest your millions in real estate
Amongst locations, realtors suggest the Core Central Region.   Individuals seeking shelter in the real estate market amidst the rising inflation must consider three things before deciding where to invest their millions in.   George Tan, managing director of Savills Digital Residential Marketing, said one of these factors is location.    Tan said buyers should consider areas which are highly demanded and well located—easy access to prestigious or international schools, MRT, malls and food and beverage (F&B) establishments. All these will contribute to good rental demand.   PropNex realtor, Andy Lim, echoed this, adding that buyers should particularly invest in properties within one kilometre of the prestigious schools.