Caution the watchword as US-China trade tensions hang over MAS policy

Singapore

ESCALATING trade tensions between the United States and China could prompt Singapore's central bank to adopt a more cautious policy stance than it originally intended at its upcoming April meeting, economists say.

Market watchers were widely expecting the Monetary Authority of Singapore (MAS) to tighten its Singdollar policy in response to improving growth and rising inflation. However, protectionist sabre-rattling by the world's two largest economies has shifted the needle.

If the risk of "tit-for-tat protectionism" intensifies in the coming weeks, Singapore's central bank could decide to hold back on policy tweaks.

The central bank uses the exchange rate as its main monetary policy tool to …