The Monetary Authority of Singapore (MAS) lowered the slope and centre of the SGD NEER band to zero percent per annum today. Economists at Standard Chartered Bank expect the SGD NEER to trade in the weaker half of the ‘new’ policy band.
Key quotes
“The SGD NEER slope was recentered to prevailing SGD NEER index levels, which is ‘slightly below the mid-point of the policy band’ – we estimate this to be 1% lower than its previous centre.”
“The MAS projected core inflation at -1% to 0%, versus 0.5% to 1.5% previously. The headline inflation forecast was also lowered to -1% to 0% from 0.5 to 1.5%.”
“We expect the SGD NEER to trade in the weaker half of the ‘new’ policy band amid continued economic uncertainty and poor external demand.”
“Given low risks of an intermeeting policy decision, we do not expect the SGD NEER to price another recentring any time soon. As such, we do not expect the SGD to underperform other regional currencies.”
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