MAS’ decision to steepen the S$NEER seen as prescient

This is according to a joint CPI release by MAS and MTI.

The Monetary Association of Singapore’ decision to pre-emptively tighten monetary policy settings by steepening the S$NEER slope from 0% to 1% appreciation per annum appears prescient, OCBC said in a commentary.

"With the upside surprise in the October CPI print, a legitimate concern is whether there is a need to frontload the policy tightening, especially since the policy review frequency is twice annually," OCBC’s Selena Ling, head of Research & Strategy, said.

On a global level, market speculation has pointed to major central banks needing to step up the pace of recalibration in order to deal with the inflationary pressure.

Ling said, "Whilst there is a need to be watchful about the inflation overshoot and the potential entrenching of inflationary expectations, there is no need to jump the gun and worry about an inter-meeting MAS move at this juncture as the core CPI print is still within the 1-2% range tipped for 2022."

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