Singapore’s central bank is likely to tighten its policy settings at its review this month, the third time in a row, as inflationary pressures intensify due to global supply-side disruptions and an easing of the city-state’s border controls.
All 15 economists polled by Reuters forecast the Monetary Authority of Singapore to tighten its policy, but they are divided on how aggressive the central bank is likely to be and which of its various settings it will change.
Instead of interest rates, the MAS manages policy by letting the local dollar rise or fall against the currencies of its main trading partners within an undisclosed band, known as the Nominal Effective Exchange Rate.
It adjusts its policy via three levers: the slope, mid-point and width of the policy band.
Of the economists polled, three expect the MAS to only raise the slope of the band, while another five expect the MAS to raise the slope of the band along with an upward re-centering of its mid-point.