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Economist at UOB Group Barnabas Gan, Senior FX Strategist Peter Chia and Rates Strategist Victor Yong assess the latest meeting by the Monetary Authority of Singapore (MAS).

Key Quotes

“In its April Monetary Policy Statement (MPS) release, the Monetary Authority of Singapore (MAS) kept its policy parameters unchanged. This means that there was no change to the gradient and width of the policy band, as well as the level at which it is centred.”

“In response to the improved growth outlook, the MAS projected that Singapore’s GDP growth in 2021 will likely ‘exceed the upper end of the official 4-6% forecast range, barring a setback to the global economy’.  This is compared to our recent upward revision for fullyear growth to clock +5.5% in 2021. The improving economic backdrop also suggests that Singapore’s negative output gap will narrow through the course of 2021.”

“Also in line with our call, MAS highlighted increased inflation risks in 2021. In the MAS monetary policy statement, policy-makers upgraded Singapore’s headline inflation forecast to a range of between +0.5% and +1.5% for the year ahead, up from a previous range of between -0.5% and +0.5%. Core inflation is also expected to “step up in the months ahead”, and average at a range of 0.0% and +1.0% in 2021. This compares to our headline and core inflation outlook of +1.0% in 2021.”