Singapore Likely Needs More Easing to Support Growth

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.