VIEW: ANZ Look For Further MAS Tightening In October

ANZ note that “increasing price pressures and upside inflation risks were the main reasons for the tightening move. We suspect that the recent weakening in the Singdollar, due to USD strength, was also partly behind the decision. Despite the MAS having increased the slope by a cumulative 200bps and re-centring by a total of 350bps since October 2021, further tightening at the next scheduled October review remain on the cards, in our view. The expected moderation in GDP growth into next year would still leave the economy growth at near trend, which mean the output gap will stay positive. The labour market is set to stay tight given that increases in labour supply are unlikely to catch up with demand at least for the rest of this year.”