monetary policy

Rising odds of Singapore easing may see yields go up, not down

(July 22): A rapid deterioration in Singapore’s economic data has fuelled speculation the central bank will ease monetary policy. The result may be higher interest rates and bond yields.

Bets the Monetary Authority of Singapore will adjust policy have intensified after government reports over the past month showed the economy unexpectedly shrank 3.4% in the second quarter and exports slumped 17.3% in June. The trade-reliant economy has suffered amid escalating tensions between the US and China.

Mysteries of monetary policy

SINGAPORE (July 15): One of the remarkable features of post-war economic history has been the taming of inflation in the US and many other countries since the mid-1980s. Before then, the US inflation rate (based on the deflator for personal consumption expenditures) averaged 6.6% a year during the 1970s, and exceeded 10% in 1979-1980.

Mysteries of monetary policy

SINGAPORE (July 15): One of the remarkable features of post-war economic history has been the taming of inflation in the US and many other countries since the mid-1980s. Before then, the US inflation rate (based on the deflator for personal consumption expenditures) averaged 6.6% a year during the 1970s, and exceeded 10% in 1979-1980.

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MAS maintains monetary policy stance amid tough economic outlook; records $19.2 bil in earnings

SINGAPORE (July 1): The Monetary Authority of Singapore will keep its exchange rate-based monetary policy stance, signalling a status quo in line with that of the US Federal Reserve. This comes after two rounds of tightening by MAS last year, while keeping the status quo in April.

“MAS’ monetary policy stance remains appropriate against the backdrop of subdued inflation and weakening growth prospects,” said Ravi Menon, managing director of MAS, at a press briefing on June 27 at the release of its 2018/19 annual report.

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RHB stays 'overweight' on Singapore banks as MAS keeps policy unchanged

SINGAPORE (Apr 15): RHB Group Research is maintaining its “overweight” call on Singapore banks, after the Monetary Authority of Singapore (MAS) on Friday kept its monetary policy settings unchanged amid a worsening global growth outlook and low inflation.

MAS uses the exchange rate as its main policy tool. After tightening policy twice last year, the central bank last week left the slope and width of the currency band unchanged, as well as the level at which it is centred.

MAS says the stance is “consistent with a modest and gradual appreciation path” of the currency band.

Time for a true global currency

SINGAPORE (April 15): This year, the world commemorates the anniversaries of two key events in the development of the global monetary system. The first is the creation of the International Monetary Fund at the Bretton Woods conference 75 years ago. The second is the advent, 50 years ago, of the Special Drawing Right (SDR), the IMF’s global reserve asset.

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Singapore offers buffet of attractive yield plays amid the easing policy environment, says UOB

SINGAPORE (April 1): UOB Kay Hian is recommending a wide variety of yield plays offered by Singapore ranging from aviation and banks, to developers and REITs as central banks around the world continue to ease their monetary policies.   

In a particular, the research house is expecting dovish dispositions at both the Federal Reserve (Fed) and the European Central Bank (ECB) to rekindle general investor interest in yield plays, as an abundance of liquidity make their recurrent dividends more attractive.

Hong Kong tightens liquidity with $260 mil currency defence

HONG KONG (Mar 11): Hong Kong faces the likelihood of rising borrowing costs after the city’s de facto central bank intervened to defend its currency peg for the first time since August.

The Hong Kong Monetary Authority bought HK$1.51 billion ($260 million) of local dollars during London and New York trading hours after the currency fell to the weak end of its trading band, it said in a statement Saturday. The move will reduce the aggregate balance, a measure of interbank liquidity, to a decade low of HK$74.8 billion.

Time to stock up on defensive assets for a volatile 2H18, says State Street

SINGAPORE (June 25): State Street Corporation advises investors to start adopting a more defensive stance on expectations of global volatility in 2H18, as the environment becomes more challenging for risky assets such as such as global equities, high-beta developed market currencies, and emerging markets (EMs) in general.

In a Monday release, Lee Ferridge, head of Global Macro Strategy for North America at State Street Global Markets, says he foresees rising inflation and falling liquidity to create a challenging environment for risky assets going forward.

MAS expected to normalise monetary policy tomorrow: Maybank

SINGAPORE (Apr 12): Maybank Kim Eng Research says it expects the Monetary Authority of Singapore (MAS) to normalise monetary policy on Friday amid rising global geopolitical tensions.

Singapore’s central bank is scheduled to issue its semi-annual policy statement at 8am on Apr 13.

“Our long-held house view is for the MAS to normalise monetary policy with a shift to a ‘modest and gradual appreciation’ path from its current neutral stance,” say Maybank analysts led by Saktiandi Supaat in a report on Thursday.

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