Singapore's central bank decisions don't usually generate much excitement, but economists are split on whether more easing may be on tap after a surprise move earlier this year.
"It's definitely a closer call than it has been in a while," Daniel Martin, an economist at Capital Economics, said Friday.
"Consumer price inflation is extremely low. I don't see much reason for them not to loosen," he said. "On the other side, they already loosened in January. They may see it as already enough." Martin expects policy easing as wage inflation, one of the Monetary Authority of Singapore's (MAS) key concerns, fell sharply in the fourth quarter. The decision is due Tuesday.
Rather than use interest rates, Singapore's central bank sets its monetary policy by adjusting an undisclosed trading band for the currency based on a basket of currencies weighted to reflect trade levels with the city-state. The MAS may intervene if the currency moves outside its band.
Usually, the MAS sets policy just twice a year -- in October and April. But in a surprise move, the MAS in January announced that it was reducing the slope of the Singapore dollar's appreciation against the currency basket. The slope was last flattened in 2011 and not only was it the first policy change since April 2012, it was the MAS' first unscheduled statement since 2001.