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SGD NEER Still Lagging Inflation

SGD

Today's Singapore inflation data for April came in a little weaker than expected. Still, the SGD NEER is lagging the surge in inflation pressures.

  • Headline CPI printed at 5.4% YoY, versus 5.6% expected and 5.4% YoY previously. The MoM fell by 0.1%, versus 0.2% expected. Core inflation was also weaker than expected at 3.3% YoY, versus the 3.4% estimate by the market.
  • These are still strong numbers by historical standards and the MAS expects core inflation to be supported by wages pressure from the tight labor market. Headline pressures are also expected to remain elevated given ongoing supply constraints.
  • The SGD NEER is up strongly over the past 12 months, as the MAS has started to tighten policy, but is still lagging inflationary pressures, see the chart below.

Fig 1: SGD NEER & Measures Of Singapore Inflation

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Today's Singapore inflation data for April came in a little weaker than expected. Still, the SGD NEER is lagging the surge in inflation pressures.

  • Headline CPI printed at 5.4% YoY, versus 5.6% expected and 5.4% YoY previously. The MoM fell by 0.1%, versus 0.2% expected. Core inflation was also weaker than expected at 3.3% YoY, versus the 3.4% estimate by the market.
  • These are still strong numbers by historical standards and the MAS expects core inflation to be supported by wages pressure from the tight labor market. Headline pressures are also expected to remain elevated given ongoing supply constraints.
  • The SGD NEER is up strongly over the past 12 months, as the MAS has started to tighten policy, but is still lagging inflationary pressures, see the chart below.

Fig 1: SGD NEER & Measures Of Singapore Inflation

Keep reading...Show less