Quick takes: Economists on the latest Monetary Authority of Singapore decision

Philip Wee, senior currency strategist, DBS:

"Contrary to consensus, we were correct about the Monetary Authority of Singapore (MAS) increasing the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band this morning. The centre and the width of the band were left unchanged. The decision reflected confidence in the resilience of the Singapore economy and was considered a timely response to pre-empt global inflationary pressures."

Selena Ling, head of treasury research and strategy, OCBC:

"The policy concerns appear to be more persistent and broader prices pressures... As a small and open economy dependent on many goods imports and also migrant workers, the pass-through to end-consumers may be fairly immediate. Hence the S$NEER slope steepening move today would help alleviate some of the broad US dollar strength and contain imported inflation for goods from regional economies."

Vishnu Varathan, head of economics and strategy, Mizuho:

"The MAS anticipates concurrent build-up in inflationary pressures as demand recovery conspires with capacity/supply-chain kinks and higher cost-push. Potential for extensive 'pass-through' of prominent energy inflation and harder-to-untangle supply kinks is worrisome, especially as tightening job market condition revive wage pressures amid persistent cost-push."

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Priyanka Kishore, head of India and South-east Asia economics, and Jung Sung-Eun, senior Singapore economist, Oxford Economics:

"We estimate that S$NEER is currently trailing well within the policy band at slightly above the centre of the slope. The sharp rise in prices since April this year likely pushed the central bank to tighten its policy. Recent price pressures have been felt across the board... We think this is the start of a tightening cycle of MAS monetary policy as domestic demand accelerates and output returns to its potential."

Joey Chew, senior Asia currency strategist, HSBC:

"The S$NEER re-tested its year-to-date high upon the MAS's unexpected decision to raise the slope of the policy band. At the time of writing, the S$NEER was 1.45 per cent above-mid in our model. It had already climbed from 0.9 per cent above-mid in the first week of October to 1.3 per cent just before the monetary policy statement, so the relatively modest knee-jerk reaction is understandable. The MAS was very hawkish. It sounded confident about global and domestic growth remaining above trend next year."