MAS’s move to strengthen SGD unlikely to be ‘game changer’ for USD/SGD upward trend: analysts

THE surprise off-cycle move by Singapore’s central bank to tighten monetary policy is unlikely to weaken the US dollar’s (USD) strength against the Singapore dollar (SGD), analysts said.

The USD saw a knee-jerk 1 per cent fall against the SGD about 20 minutes after the Monetary Authority of Singapore (MAS) made its off-cycle announcement, its second such move this year, to combat rising inflation, even as it raised its core inflation forecast range to 3-4 per cent, from 2.5-3.5 per cent.

MAS typically reviews its monetary policy twice a year, but since October last year, it has made 4 moves to change its Singapore dollar nominal effective exchange rate (S$NEER) policy band settings.