Chart of the Day: This graph is proof that MAS monetary policy won't be budged

SGD NEER predicted to remain at 2.5%.

UOB analysts expect MAS to release its monetary policy statement on Friday, 11 October 2013. Some believe that with below potential growth, MAS could loosen up monetary policy stance. 

After all, inflation from house and car prices had moderated considerably.

Here's more from UOB:

However, given that core inflation is still in the radar screen and looks to be trending higher, we believe that the MAS will keep to the bias of inflation over growth.

With that, our call is for MAS to maintain the “modest and gradual appreciation” stance of the SGD NEER, with no change to the steepness of the policy slope, center or width of the policy band. We estimate the SGD NEER slope to remain at 2.5%. 

US QE tapering will eventually take place and our view for the USD/SGD trending higher going into 2014 remains, but the tapering delay in September will shift our target of the USD/SGD to 1.27 by end of 2013, and moving on towards 1.29 in 1Q 2014. 

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