OCBC: MAS May Have Room to Keep Policy Unchanged

According to Jin10, OCBC Group research analyst Christopher Wong said the Monetary Authority of Singapore may have room to keep its monetary policy unchanged, given that core inflation data for April and May came in below expectations. He added that energy prices have retreated from earlier highs, while policy tightening in April may already have been enough to partly offset potential imported inflation pressure. Wong also said risks of further policy tightening remain, citing renewed rises in services inflation, persistently elevated inflation expectations, and the possibility that earlier import cost pressure continues to pass through the economy. He said Singapore's central bank uses the exchange rate as a policy tool to maintain price stability because the country is small and open.