Singapore's MAS does bare minimum easing

The Monetary Authority of Singapore (MAS) implemented the minimum form of easing in the latest policy statement. This is despite the modest growth picture and subdued inflation. 

MAS reduced the slope of the SGD NEER policy band slightly in what it termed as a measured adjustment. This is 2nd adjustment this year after the surprised move in January. It left the centre and bandwidth unchanged. MAS' prime focus is still seemingly to anchor inflationary expectations. 

Its reticence to ease more forcibly could also stem from a reluctance to add to market volatility, given uncertainties over the China slowdown and the Fed liftoff. The advance Q3 GDP slowed to 1.4% y/y from a revised 2% in Q2 (previous: 1.8%). This translated to 0.1% q/q annualized vs -2.5% in Q2 implying no technical recession. 

"Growth is expected to come in at the lower end of 2-2.5% for 2015. USD-SGD is slightly lower after the announcement to 1.3950 but our bias is still to the upside with a year-end target of 1.45", estimates Commerzbank.