The SGD NEER is edging closer towards the top end of the MAS band, according to Goldman Sachs estimates. We are now at -0.40%, see the chart below. This is still below YTD highs, but not by much. USD/SGD tracks around recent ranges, unable to break above 1.4100 (last at 1.4065/70).
- Market risks are pointing towards a further MAS tightening in October. Recent data outcomes are leaning that way, although note August CPI data is due this Friday. The market expects further gains (headline to 7.2% from 7.0%, core to 5.0% versus 4.8% previously).
- Interestingly, Singapore GDP growth expectations now sit around expectations for the rest of Asia in 2022 at ~3.6%. This down from around 4% earlier in the year, while the rest of the region has seen sharper downgrades, led by China.
- Earlier, MAS Managing Director Menon gave a speech around critical economic uncertainties (see this link). While Menon recognized the risks around global growth next year, he also stated inflation risks are tilted higher.
Fig 1: Goldman Sachs SGD NEER - Deviation from Top End Of The MAS Band
Source: Goldman Sachs/MNI - Market News/Bloomberg