Singapore central bank with a small tightening of policy
Monetary Authority of Singapore will raise the slope of the $NEER policy band slightly
- slope was previously at zero %, to be raised slightly says the MAS
- MAs says the ap[appreciation path for the $NEER policy band will ensure price stability over the medium-term while recognising the risks to the economic recovery
- width of policy band to remain unchanged
- centre point of policy band to remain unchanged
In the preview I posted yesterday I took a brief look at how the MAS implements monetary policy. The Bank does not do so via interest rates but via the SGD exchange rate.
SGD has moved higher in the wake of the small, but surprise, tightening.
- core inflation is expected to rise to 1-2% next year
- cpi-all items inflation will come in around 2% in 2021
- cpi-all items inflation to average 1.5-2.5% next year
- core inflation will come in near the upper end of the 0-1% forecast range for 2021
- core inflation is expected to increase further to 1-2% in 2022
- GDP growth in the Singapore economy is expected to come in at 6-7% this year
- gdp to register a slower but still-above trend pace in 2022