Overview
- MAS, which on Tuesday increased slightly the slope of its S$NEER exchange-rate band, kept the band’s width and center unchanged.
- Officials said core inflation is set to pick up and stay elevated over coming quarters, and analysts had pointed to war-driven energy prices as the key risk.
- Preliminary data released alongside the decision showed GDP grew 4.6% year over year in the first quarter, while output slipped 0.3% from the prior quarter.
- Singapore manages prices by guiding the currency rather than interest rates, so a steeper slope lets the Singapore dollar appreciate faster to make imports cheaper and cool price pressures.
- Most economists had expected a tightening at this review after three holds since July and an easing last April, and some see a possible second move later in the year if inflation stays firm.