Emerging Markets | FX | Monetary Policy & Inflation
Surprise Shift in S$NEER Does Not Rule Out April Tightening
- By Caroline Grady
- 6 min read
Summary
• Singapore’s central bank tightened policy on Tuesday in an unscheduled meeting, increasing the appreciation bias on S$NEER.
• Discomfort over rising inflation, alongside a continued domestic recovery, was the rationale for the pre-emptive move.
• The decision to move ahead of the Fed does not prevent further tightening at the next scheduled review in April, but leaves it dependent on whether inflation comes in above the upwardly revised forecasts.
Summary
• Singapore’s central bank tightened policy on Tuesday in an unscheduled meeting, increasing the appreciation bias on S$NEER.
• Discomfort over rising inflation, alongside a continued domestic recovery, was the rationale for the pre-emptive move.
• The decision to move ahead of the Fed does not prevent further tightening at the next scheduled review in April, but leaves it dependent on whether inflation comes in above the upwardly revised forecasts.
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