SGD: MAS Preview, No change but market under-prices easing risk - ANZ

Khoon Goh, Senior FX Strategist at ANZ Research, expects MAS to maintain their current policy settings at the April review.

Key Quotes

• “Despite downside risks to growth and inflation, we do not see conditions as sufficient to warrant a shift to a neutral policy at this time.

• However, further easing later in the year cannot be ruled out. The market is under-pricing this risk, in our view.

• With the S$NEER trading above the midpoint, we see scope for the SGD to weaken. The MPS is unlikely to have a hawkish tone, and our economists expect the advanced Q1 GDP estimate to show a contraction on a sequential annualised basis, which should weigh on the currency.”