Economists at Credit Suisse expect the MAS to increase the slope of the SGD NEER policy band on 14 April and forecast USD/SGD to rise within a range of 1.3450-1.3750.

Hawkish expectations

“We and a majority of economic forecasters expect the MAS to increase the slope of the SGD NEER policy band on 14 April. Given that market expectations for tightening are high, we do not recommend being short USD/SGD or long SGD NEER ahead of the April MAS decision.” 

“USD strength against the NEER basket currencies (including EUR, JPY, MYR AUD and KRW) point to an increase in USD/SGD in the short-term. We forecast USD/SGD to rise within a range of 1.3450-1.3750 in the next three months.”

“The MAS will remain hawkish and will likely tighten again in October as energy prices remain elevated and Singapore’s output gap remains positive. As a medium-term view for further MAS tightening, we would look to receive SGD IRS vs USD, but prefer to wait until after the 14 April decision for better entry levels.”