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Economists at ANZ expect the Monetary Authority of Singapore (MAS) to leave current policy settings unchanged at their October review. They expect no change to be made to the slope, level, or width of the policy band. Even with a stable policy stance, there is still scope for the S$NEER to rise within the upper half of the policy band. The economists forecast the Singdollar to appreciate further to 1.355 per US dollar by year-end. 

Key quotes

“We expect the policy decision to be straight forward at the October MPS. We see the MAS keeping to the stable policy stance, making no change to the slope (0%), width (2%) or level of the policy band.”

“With little risk of further policy easing by the MAS, and Singapore bond yields offering a pick-up over US Treasuries, this should underpin the SGD. Prospects of US monetary policy staying more accommodative for longer should see further pressure on the USD, which will push the Singdollar higher by default.” 

“Importantly, the S$NEER is currently trading 0.6% above the midpoint of the policy band, by our estimate. There is scope for further S$NEER appreciation before the strong side is reached. It is common for the S$NEER to trade towards the upper part of the policy band even in periods of a zero percent slope. We see the Singdollar appreciating to 1.355 per US dollar by year-end.”