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2026-04-07 11:09:15
[Mizuho Securities: Monetary Authority of Singapore May Tighten Monetary Policy in Two Steps to Combat Price Pressures] (1) Mizuho Securities Singapore analyst Vishnu Varathan said that tightening Singapore's monetary policy in two steps may be the best option. The first step is to move the center point of the nominal effective exchange rate band of the Singapore dollar upward to preemptively suppress price pressures. (2) The second step is to restore the slope of the band from the previous downward adjustment to neutral. Although tightening in advance may exacerbate demand shocks, it can effectively deal with price shocks and provide price stability and cost buffers. (3) Recent growth and safe-haven inflows also provide a reason for a two-pronged approach. The Monetary Authority of Singapore uses the exchange rate as a policy tool because its trade flows far exceed domestic activities.
