Investor Presentaiton
Accommodative monetary policy stance
|| UOB
4Q19
1Q20
2Q20 3Q20
4Q20 1Q21
2Q21f
3Q21f 4Q21f 1Q21f
US 10-Year Treasury
1.92
0.67
0.66
0.68
0.91
1.74
1.90
1.95
2.00
2.10
US Fed Funds
1.75
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
SG 3M SIBOR
1.77
1.00
0.56
0.41
0.41
0.44
0.40
0.40
0.40
0.40
SG 3M SOR
1.54
0.92
0.20
0.18
0.19
0.36
0.25
0.25
0.25
0.25
MY Overnight Policy Rate
3.00
2.50
2.00
1.75
1.75
1.75
1.75
1.75
1.75
1.75
TH 1-Day Repo
1.25
0.75
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.75
ID 7-Day Reverse Repo
5.00
4.50
4.25
4.00
3.75
3.50
3.50
3.50
3.50
3.75
CH 1-Year Loan Prime Rate
4.15
4.05
3.85
3.85
3.85
3.85
3.85
3.85
3.85
3.85
In response to COVID-19 pandemic, the Fed pursued a "forceful monetary policy" (lowered policy rate to 0.00-0.25%;
restarted quantitative easing; introduced credit support measures; and provided US dollar funding). The Fed continued to
assure it will not react pre-emptively and provide clear communication well in advance of any bond-buying taper. The Fed is
expected to start taper discussions only start in late 2021/early 2022, with policy rates staying at 0.0-0.25% at least until 2023.
In its April 2021 Monetary Policy Statement release, the Monetary Authority of Singapore (MAS) kept its policy parameters
unchanged. This means that there was no change to the gradient and width of the policy band, as well as the level at which it
is centred. The MAS projected that Singapore's GDP growth in 2021 will likely "exceed the upper end of the official 4-6%
forecast range, barring any setback to the global economy."
In other parts of Asia, monetary policies are expected to be kept accommodative to facilitate the economic recovery. Although
economies are expected to have seen their worst, the level of uncertainty remains high and delays in COVID-19 vaccine
rollout as well as fresh outbreaks could postpone the reopening of borders.
Source: UOB Global Economics & Markets Research forecasts
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