MAS unlikely to change policy in October: experts

UOB Kay Hian said an off-cycle announcement will only happen if there's a sharp growth downgrade in inflation.

 It is unlikely for the  Monetary Authority of Singapore (MAS) to change its monetary policy in its October meeting amidst slowing inflation pressures, according to several analysts.

RHB, however, said that it "may still be too early to tell if the abovementioned upside risks come to fruition," RHB said.

"The MAS had kept its policy parameters unchanged in the earlier April 2023 meeting, where we estimated the S$NEER at a 1.5% appreciation gradient with a +/-2.0% band. We think that Singapore’s hiking cycle is over after five consecutive tightening moves since October 2021," RHB commented.

UOB Kay Hian had a similar sentiment, saying that it is "too soon to expect monetary policy to reverse course given the stickiness of core inflation."

"Faced with sticky inflation and a weaker growth outlook, we keep the view that the tightening cycle to have ended in Apr and the MAS to maintain this pause in the next meeting in October," UOB Kay Hian said.

"If there is an off-cycle announcement before October, we think it will likely be due to a sudden worsening in external conditions leading to a sharp growth downgrade, so the MAS will likely shift to a more accommodative policy rather than further tightening in its next move, but that is not our base case to expect an off-cycle policy announcement for now," the analyst added.