Commerzbank analysts highlight that the Monetary Authority of Singapore (MAS) unexpectedly tightened policy for a second straight meeting, slightly increasing the Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) slope while leaving the band’s centre and width unchanged. The move signals greater concern over inflation risks despite benign data and softer energy prices. USD/SGD dipped modestly toward 1.2890 after the announcement and was around 1.2910 earlier.
Surprise MAS move supports Singapore Dollar
“In a surprise move, the Monetary Authority of Singapore (MAS) tightened monetary policy for the second consecutive meeting.”
“It increased the rate of appreciation of the SGD NEER policy band “very slightly”, with no changes to the centre or width of the band. Importantly, MAS said that the increase was smaller than the tightening in April.”
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