Singapore central bank likely to keep current stance of modest, gradual appreciation of SGD NEER band at policy review this month as growth momentum slows in 2H, global economic uncertainty lingers, says RBS.

“By standing pat on policy, the MAS would also be putting a cap on further speculative inflows capitalising on a faster pace of currency appreciation. This is additional liquidity that the banking system could do without for now, with interest rates still very low and property-price cooling measures not yet having made full impact,” RBS says.

Adds, view on local dollar strong, USD/SGD likely to fall to 1.3000 by year-end, 1.2600 by mid-2011. Pair last 1.3133 after touching 1.3104 record low today.