Reuters file photo: The logo of the Monetary Authority of Singapore (MAS) on its building in Singapore is depicted in this February 21, 201 file photo. Reuters / Edgar Su / File photo
Written by Chen Lin
SINGAPORE (Reuters) – Singapore’s central bank is expected to suspend monetary policy in its October review, analysts say, as highly contagious coronavirus diversity spreads locally and around the world, threatening the pace of economic recovery.
In a Reuters poll this week, 11 economists expect the Singapore Monetary Authority (MAS) to keep its exchange rate-based policy settings unchanged at its biennial meeting on or before October 14.
“The global outlook is still hampered by the proliferation of delta variants. The Covid-1 situation in Singapore has deteriorated,” said Dennis Chew, an economics analyst at Moody’s (NYSE :). “Monetary policy is unlikely to be tightened at such a critical juncture for the central bank.”
The city-state economy is expected to grow 6% to 7% this year after last year’s record recession as the epidemic hit trade and finance centers hard.
The Central Bank of Singapore conducts monetary policy through exchange rate settings, allowing the local dollar to rise or fall against the currencies of its major trading partners.
It was postponed to its last review in April, leaving the policy band’s appreciation rate at zero each year.
Some economists had hoped that the central bank would start tightening in October if the local epidemic situation remained stable.
However, Singapore’s new Covid-1 cases are setting a record high of more than 2,000 infections in recent days, prompting authorities to tighten measures despite the country achieving the world’s highest vaccination rate of 82%.
Economists say the sanctions could reduce recovery in consumer-facing sectors such as aviation, hospitality, food and beverages and the retail sector. The Singapore government has allocated S $ 650 million ($ 480 million) to help businesses affected by the latest measures.
MAS could tighten monetary policy in April, five economists said. Singapore’s core inflation rate – the central bank’s favorable price measure – hit a two-year high in August, but economists expect prices to remain modest in the short term and rise slowly.
Alex Lu, macro strategist at TD Securities, said:
(1 = 1.3533 Singapore Dollars)
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