The MAS is expected to maintain its modest and gradual appreciation policy when it meets on April 12

We expect no change to the centre, width or slope of the NEER policy band

Our DBS SGD NEER is at the mid-point of the band. Policy is balanced between addressing high inflation and weak exports

To augment the exchange rate policy in fighting inflation, measures have been employed to tighten credit in the housing and transport sectors

USD/SGD should test its pre-crisis low below 1.20 in the second half the year

Eoin Treacy's view Singapore has garnered a reputation for financial probity and as a safe haven for one's investment capital. This has allowed the country to become one of the world's largest private banking sectors and the Singapore Dollar has become an attractive investment vehicle.

The US Dollar fell from $1.85 to $1.20 in the decade to 2011 and spent the last 18 months ranging above $1.20. While this represents a significant appreciation by the Singapore Dollar, its neighbouring currencies also appreciated over the intervening period so that intra-Asia competitiveness remained on a relatively even keel.

With Japan now engaged in a concerted effort to weaken the Yen, the question arises as to how long will Japan's competitors in Asia tolerate the appreciation of their currencies and loss of manufacturing competitiveness? The Asia Dollar Index continues to drift lower within its 18-month range and a break in the short-term progression of lower rally highs will be required to check potential for additional lower to lateral ranging.