Elevated inflation keeping its hands tied.
Here's more from BBVA:
Singapore’s inflation rose sharply in December, to 4.3% y/y (consensus: 3.8% y/y) from 3.6% y/y the previous month, largely on increases in housing (6.7% y/y) and transportation costs (8.2% y/y).
With the MAS’s semi-annual policy meeting beginning to loom on the horizon (April), the market will gradually focus on whether the MAS will ease monetary policy (by slowing the pace of appreciation or re-centering the exchange rate band) in view of recent weak output indicators. Inflation may remain elevated in the near-term, however, as labor markets remain tight and price pressures persist due to rising wages.
We therefore think it is unlikely at this stage that the MAS will ease further. At its previous meeting in October, the MAS surprised the markets by leaving policy unchanged in view of inflation pressures.
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