MAS seen holding fire as growth recovers

SINGAPORE (March 17): Singapore’s recovery from a contraction last year may give the central bank little incentive to adjust its policy stance next month as it monitors the impact of higher US interest rates.

The Monetary Authority of Singapore, which uses the currency rather than interest rates as its main policy tool, will keep its stance unchanged at its next bi-annual meeting around mid-April, according to 15 of the 16 economists surveyed by Bloomberg. The MAS shifted to a neutral stance of zero appreciation for the local dollar last year.

Central banks in Asia are contending with the risk of capital outflows and weaker currencies as the US gradually raises interest rates. In Singapore, policy makers can take comfort in a stronger growth outlook with economists in a separate central bank survey forecasting growth of 2.3% this year from 2% in 2016.

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