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Upcoming Fed rate cuts may not have major implications for the next MAS decision

Domestic considerations will continue to dominate Singapore’s upcoming monetary policy move in October

Janice Heng
Published Thu, Sep 5, 2024 · 05:00 AM
    • Expectations have risen for a possible easing of policy by the Monetary Authority of Singapore in October.
    • Expectations have risen for a possible easing of policy by the Monetary Authority of Singapore in October. PHOTO: BT FILE

    WITH the US Federal Reserve having strongly telegraphed impending interest rate cuts at their mid-September meeting, one question is how Asian central banks will react.

    The expectation is that the Fed’s move will create space for monetary easing by other central banks, though not all of them might take the opportunity. Economists have flagged India and Thailand as two possible outliers that could keep rates higher for longer, over concerns about sticky inflation and household debt respectively.

    In Singapore, where monetary policy targets the exchange rate instead of interest rates, the influence of Fed rate cuts is even less direct.

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