There’s growing risk the Monetary Authority of Singapore could recenter lower the policy band of the SGD nominal effective exchange rate to signal a looser policy is needed to mitigate threats to growth and inflation, UOB says. Three factors could prompt the MAS to ease policy at its April meeting: lower interest rates globally, the weakness in the SGD NEER trading below its midpoint and the likelihood of a continuing negative output gap this year. For now, however, UOB reiterates its base-case view for the MAS to ease policy to neutral while keeping the width of the band and the level at which it is centered unchanged. USD/SGD is 0.1% lower at 1.4278.
