Meanwhile, the Monetary Authority of Singapore (MAS) kept all monetary settings intact today, maintaining the slope, midpoint and width of the monetary band. The MAS believes that the current S$NEER band is “sufficiently tight” given the current growth and inflation outlook. Core inflation has eased to 3.4% year-on-year from a high of 5.5% year-on-year at the beginning of the year.
Despite the moderation, the MAS remains aware of a possible rise in inflation given the recent rise in global energy prices. Uncertainty on the inflation front also remains clouded by the Federal Reserve’s outlook, given rhetoric from officials suggesting rates will likely stay high for longer.
Therefore, in a context of uncertainty about domestic growth and concerns about the trajectory of inflation, the MAS has chosen to maintain the current configuration to balance the risks to growth, taking into account a possible resurgence of pressures on the prices due to global events.