MAS likely to ease policy again as technical recession looms

The policy band will be re-centered.

A slew of uninspiring economic numbers will prompt the Monetary Authority of Singapore (MAS) to ease policy again in October, according to a report by Bank of America Merrill Lynch.

This comes after an unexpected easing move in January, when the central bank reduced the slope of its policy band.

“We think MAS will likely shift its current weak appreciation bias to a neutral (zero) bias and/or re-center the S$NEER band downwards in October, if a technical recession is confirmed for 3Q,” said BofAML.

“The S$NEER is currently trading at about 0.8% below the mid-point of the band. Short-term interest rates will likely rise further if the MAS shifts to a neutral bias in October,” the report added.