VIEW: ING: Inflation To Stay Hot, MAS Could Tighten Further In Oct

ING note that “despite the flurry of tightening by the MAS, inflation has continued to heat up. We were not all that surprised to see another off-cycle tightening by the MAS as short-end rates have clearly signalled an intention to keep the currency on the stronger side. But we had expected the adjustment to happen after an inflation data release. Surging price pressures are driven by a mix of supply side and demand side factors, pointing to inflation heating up further in the near term. With forecasts pointing to even higher inflation prints down the road, we consider it likely that we will see further action by the MAS at the October meeting. The SGD will be supported by today’s policy tightening, but with overall sentiment remaining pressured, immediate benefits may be hard to spot.”