Round-up: MAS's surprise off-cycle move to tighten its monetary policy

MAS to 'raise slightly' rate of appreciation of policy band

The Monetary Authority of Singapore (MAS) tightened policy on Tuesday (Jan 25) by raising slightly the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, after it raised its inflation forecasts for 2022.

Economists not ruling out further tightening by MAS in April despite surprise off-cycle move

After a surprise off-cycle policy tightening on Tuesday (Jan 25), the MAS could still make further moves in April as it has also raised its inflation estimates for 2022, say economists.

Looking back at inflation in 2021

Inflation was already seen as a major concern going into 2022, with Singapore's headline inflation rising faster than expected to 4 per cent in December. Take a look at how some of the significant CPI components moved in 2021.

'Modest appreciation' of SGD against USD expected as MAS tightens monetary policy

"We're keeping our view of a modest appreciation of the Singapore dollar against the US dollar. The US Federal Reserve turned hawkish since late last year. At the same time, we're seeing a more hawkish MAS as well (so) it will cancel out each other," said Bank of Singapore currency strategist Sim Moh Siong.

Singapore property market could see limited impact from tightened monetary policy

Economists do not expect a slight appreciation in the Singapore dollar (SGD) to deter foreign property developers and buyers. Some say it may even be a boon.

BT Explains: The 3 ways that MAS might change exchange rate policy

While most central banks in other countries use interest rates as a monetary policy tool, MAS makes adjustments to the policy band of the exchange rate - the S$NEER - to ensure prices of goods and services remain stable, BT explains the 3 different exchange rate policy levers that MAS has.

MAS tightening monetary policy paves way for GST hike: economists

The tightening of monetary policy is unlikely to delay the government's planned goods and services tax (GST) hike from 7 to 9 per cent, and may in fact pave the way for the raise by controlling inflationary pressures, said economists.