VIEW: TD: MAS To Wrestle With Inflation In 2022

TD Securities note that “price pressures have been broadening and upside risks are rising since the Oct MPS meeting. The Singapore economy is likely to see a robust expansion in 2022 which allows the MAS to focus on taming inflation. We think external cost pressures are likely to remain in the quarters ahead while domestic policy developments and disinflationary effects from past policies could also contribute to higher inflation. We see room for the MAS to take a more aggressive stance at its April 2022 policy review, with a combination of an upward re-centering of the midpoint and a 50bps increase in the slope of the policy band. Furthermore, we can't completely rule out an off-cycle tightening before the April meeting, especially if global central banks start to tighten faster than expected.”