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Credit Suisse expects MAS to ease Singapore monetary policy in April

Monday, January 12, 2015 - 11:20
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CREDIT Suisse now believes Singapore's central bank will ease monetary policy in April, considering the weaker inflation outlook and subdued GDP (gross domestic product) growth prospects.

CREDIT Suisse now believes Singapore's central bank will ease monetary policy in April, considering the weaker inflation outlook and subdued GDP (gross domestic product) growth prospects.

Even so, the labour market continues to remain tight, and a still-healthy job market will likely limit the extent of easing by the Monetary Authority of Singapore (MAS), Credit Suisse research analysts said in a note on Monday.

"With headline inflation likely to remain subdued over 2015, and growth expected to be weak at least in the near term, we believe that a reduced slope - from our (foreign exchange) team's current estimated 2 per cent per annum to around 0.5 to one per cent per annum - is the most likely outcome of the MAS's policy meeting in April.

"The next most likely outcome is a shift to an outright neutral and zero pace of appreciation. The conditions for this would be if economic activity in Q1 moderates further, perhaps a decline of more than 2 per cent quarter-on-quarter annualised, or the unemployment rate rises closer to 2.5 per cent from 2 per cent."

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