For now, prices aren’t expected to rise due to domestic cost pressures.
The Monetary Authority of Singapore (MAS) left the current policy of a zero appreciation of the SGD nominal effective exchange rate (NEER) unchanged.
According to UOB, although the MAS expects core inflation to remain muted due to subdued domestic cost pressures, imported inflation is “likely to rise mildly”.
As such, the MAS removed the word extended from the phrase “current neutral SGD NEER policy is deemed appropriate for an extended period of time”.
UOB analyst Francis Tan commented, "We take this to mean that the MAS will be assessing more carefully the potential normalization of Singapore’s monetary policy from the next policy meeting (April 2018) onwards, possibly embarking on a 0.5% pa slope in the next meeting."
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