Two reasons why SGD depreciation is still off the table

SINGAPORE (Oct 6): The Monetary Authority of Singapore is unlikely to adopt a negative slope for the Singapore Dollar nominal effective exchange rate (NEER) during the October review, after adopting a neutral slope in April.

Instead, the Bank of Singapore’s FX Research believes there is a 70% likelihood that MAS leave its policy unchanged.

In a note on Thursday, Bank of Singapore’s Senior Currency Strategist, Sim Moh Siong, noted that a negative slope would lead to a depreciation of the currency and “could be perceived as going against the spirit of G20 commitment to avoid competitive devaluation”.

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