Negative inflation print points to another MAS easing in April: BofAML

The exchange rate band will be re-centered.

The negative inflation print in February is likely to lead to another easing by the Monetary Authority of Singapore (MAS) in its upcoming April policy meeting.

According to a report by Bank of America Merrill Lynch, the MAS will likely re-center the exchange rate band lower to the prevailing level of the S$NEER, following the surprise move in January where it reduced the slope of the NEER appreciation bias. 

“We are expecting the Monetary Authority of Singapore to further ease policy at its mid-April meeting given weaker growth prospects and lower inflation risks. We are not expecting the MAS to shift to a neutral bias (zero appreciation) as such a move is more drastic and occurs largely only in recessions and crises,” stated the report.