Analysts explain how MAS will tighten monetary policy

The Monetary Authority of Singapore may tighten monetary policy to deal with concerns about inflation. For UOB, the policy tightening will be done through “re-centering of S$NEER policy mid-point.”

More from OMY: MAS pushes to fight inflation through monetary policy tightening

According to UOB, their confidence level for tightening was lowered due to the European and US banking industry turmoil.

“If systemic impact and contagion risks on the US and global financial sector continue to be reduced by actions from the major central banks and governments, then it will be reasonable to expect the MAS to tighten further,” stated UOB.

Meanwhile, Maybank reported that core inflation remained high in February because of rapid increases in retail and goods prices. Maybank also expects policy tightening in April through recentering.

Additionally, ING said that MAS may retain its hawkish stance until inflation calms down.

“Complicating any potential MAS moves however is the fact that real sector economic data has been soft with retail sales unexpectedly stalling in January while non-oil domestic exports remain in contraction for five months and counting,” shared ING.

More from OMY: Analysts expect central bank to further tighten monetary policy in April

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