Goldman Sachs: MAS To Raise NEER Slope, Midpoint

Goldman Sachs expect the MAS to “raise their headline inflation forecast band at the upcoming meeting to 3.5%-4.5% (from 2.5%-3.5% currently). Core inflation forecasts could potentially also be adjusted higher by 50bp (from 2%-3% currently). Given risks to the inflation trajectory and with MAS historically placing significantly more emphasis on inflation trends compared to growth, we continue to forecast additional tightening with a 50bp slope increase to 1.5%/annum, and an upward re-centering of the SGD NEER to the prevailing level of the SGD NEER (currently 1.8%-1.9% above the mid-point of the policy band) at the April meeting.”