MAS meetings are twice a year, in April and October. The April meeting concludes on Wednesday 14th
- announcement due at 0000GMT alongside Q1 advance GDP
Earlier preview here:
While an 'on hold' decision is widely expected there is scope for a more hawkish statement indicating tighter policy later this year. A snippet from HSBC:
- expecting a hawkish policy statement from Monetary Authority of Singapore
- MAS may drop its forward guidance (currently for neutral currency policy)
HSBC cite for their expectation:
- a recent sharp rise in the SGD nominal effective exchange rate
- fall in USD/SGD forward points and front-end SGD rates
HSBC point out that a shift away from MAS neutral currency policy forward guidance would allow for a move to a positive NEER slope later in 2021. HSBC doe put on the caveat though the risk is that the MAS could keep its forward guidance intact, saying the improving data does not necessarily mean immediate policy normalization and that core inflation is more muted than in October 2017 when MAS dropped its forward guidance.
---
Noite that monetary policy in Singapore is conducted via the exchange rate, not interest rates.
- The MAS guides the Singapore dollar against a basket of currencies
- adjusts the pace of appreciation or depreciation by changing the slope, width and centre of a currency band
- The Monetary Authority of Singapore does not disclose details of the basket, the band or the pace of appreciation or depreciation.
