Banknotes of Singapore (Photo: www.straitstimes.com)Brussels (VNA) - AsSingapore continues to see sluggish trade and growth data, with core inflationat a three-year low, economists forecast the central bank to ease monetary policyin its upcoming review and provide some support to the economy.
Many expects that the Monetary Authority of Singapore (MAS) to do so via aslight reduction in the Singaporean dollar (SDG) slope in order to boost demandfor tradable goods and services.
MAS uses the exchange rate as its main monetary policy tool to balance betweeninflation from overseas and economicgrowth, and its next policy announcement is to be out no later than October 14.
The slight reduction implies an annual appreciation of around 0.5 percent forthe Singaporean dollar, down from current estimates of a 1 percent annualappreciation.
Maybank Kim Eng economist Chua Hak Bin said that even though Singapore islikely to narrowly escape a technical recession, growth is still weak. Thiscould come in at just around 0.2 percent for the third quarter, just slightlybetter than the 0.1 percent year-on-year expansion in the second quarter.
OCBC currency economist Terence Wu added that market focus has shifted fromwhether global central banks will cut rates to when and how deep rate cuts willbe.
Barclays analysts Brian Tan, Ashish Agrawal andAbbas Keshvani added that the economy has clearly proven to be on shakierground than MAS had assumed when it left foreign exchange policy settingsunchanged last April.
They said with the outlook for US-China trade negotiations and Brexit shroudedin uncertainty, MAS will want to preserve the option to reduce the slopefurther in April.
Officials likely expect the economy to stabilise next year, they added./.
Many expects that the Monetary Authority of Singapore (MAS) to do so via aslight reduction in the Singaporean dollar (SDG) slope in order to boost demandfor tradable goods and services.
MAS uses the exchange rate as its main monetary policy tool to balance betweeninflation from overseas and economicgrowth, and its next policy announcement is to be out no later than October 14.
The slight reduction implies an annual appreciation of around 0.5 percent forthe Singaporean dollar, down from current estimates of a 1 percent annualappreciation.
Maybank Kim Eng economist Chua Hak Bin said that even though Singapore islikely to narrowly escape a technical recession, growth is still weak. Thiscould come in at just around 0.2 percent for the third quarter, just slightlybetter than the 0.1 percent year-on-year expansion in the second quarter.
OCBC currency economist Terence Wu added that market focus has shifted fromwhether global central banks will cut rates to when and how deep rate cuts willbe.
Barclays analysts Brian Tan, Ashish Agrawal andAbbas Keshvani added that the economy has clearly proven to be on shakierground than MAS had assumed when it left foreign exchange policy settingsunchanged last April.
They said with the outlook for US-China trade negotiations and Brexit shroudedin uncertainty, MAS will want to preserve the option to reduce the slopefurther in April.
Officials likely expect the economy to stabilise next year, they added./.
VNA
