Brown Brothers Harriman\u2019s (BBH) Elias Haddad notes that USD\/SGD is consolidating around 1.2900 after pulling back from near 1.3000, as the Monetary Authority of Singapore (MAS) unexpectedly tightened policy for a second consecutive meeting. MAS slightly increased the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) slope while leaving band parameters unchanged, and Haddad sees scope for further tightening this year ahead of the next decision in October.<\/p>\n
Back-to-back MAS moves support SGD<\/p>\n
“USD\/SGD is consolidating around 1.2900, down from a multi-month high of almost 1.3000 on June 24. The Monetary Authority of Singapore (MAS) unexpectedly tightened policy for a second straight meeting because \u201cexternal price pressures are expected to persist and pass through more broadly to domestic consumer prices in the period ahead.\u201d”<\/p>\n
“Still, the extent of this tightening is smaller than at its last meeting in April.”<\/p>\n
“MAS noted it will increase the slope (or rate of appreciation) of the Singapore dollar nominal effective exchange rate (S$NEER) policy band \u201cvery slightly\u201d vs. \u201cslightly\u201d in April.”<\/p>\n
“The width and midpoint of the policy band were left unchanged.”<\/p>\n
“Only four out of 18 analysts in a Bloomberg survey expected a change to the slope of the S$NEER. MAS has scope to tighten policy further this year as it projects the economy\u2019s positive output gap to widen slightly in 2026.”<\/p>\n