MAS expected to ease monetary policy amid subdued levels of inflation

Victor Kang25 Sep 2019

MAS Singapore

MAS is expected to lower the annual appreciation pace of the SGD NEER policy band from one percent to 0.5 percent. 

Analysts expect that against benign inflationary pressures, the Monetary Authority of Singapore (MAS) will ease monetary policy to prop up the slowing economy, reported Singapore Business Review.

In August, core inflation reached 0.8 percent at a similar pace to July although staying at a three-year low. Similarly, headline inflation only grew slightly from 0.4 percent in the past month to 0.5 percent.

This informs the expectations by analysts for the central bank to ease policy during its policy meeting by middle of October.

“The fact that core inflation remains persistently below the medium-term historical average of just under two percent may persuade MAS to loosen monetary policy in its upcoming policy meeting,” said Barnabas Gan, economist at UOB.

Echoing the same sentiment, Chua Hak Bin, analyst at Maybank Kim Eng, expects the MAS to lower the band’s slope.

“MAS may reduce the slope slightly rather than to zero, as Singapore likely escaped a technical recession in 3Q19,” he said.

MAS is expected to lower the annual appreciation pace of the SGD NEER policy band from one percent to 0.5 percent, according to DBS senior economist Irvin Seah.

“An outsized accumulated surplus of about $15.6 billion implies ample room for aggressive fiscal support for the economy. We expect a highly expansionary fiscal policy early next year,” he noted.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email


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