“Monetary policy is a less effective tool to deal with the pandemic recession, and fiscal policy will play the leading role in supporting firms and households,” note Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye. They expect the MAS to maintain its current neutral-bias or zero-appreciation slope of the S$NEER (Singapore Dollar Nominal Effective Exchange Rate) on Oct 14.
The Monetary Authority of Singapore (MAS) is expected to leave the Singapore dollar settings unchanged at its next half-yearly review to be announced on Oct 14. In the face of the worst recession on record, economists believe that monetary policies will play second fiddle to fiscal measures in this hard slog to turn the economy around.
In its most recent review in March, MAS — in a one-two punch — paired a zero slope with a downward re-centring of its policy band. Prior to this, the central bank cut the policy to a zero-appreciation flat slope during the global oil price slump in April 2016, only to tighten the band later.
