Singapore an early mover in Asia’s inflation fight

City-state is on the monetary tightening vanguard as Asia’s central banks expected to start shifting policy to contain rising prices

A day after Singapore’s government released inflation data that surged past expectations with consumer price growth at a nearly eight-year high in December, its central bank announced on January 25 its second monetary tightening in three months in a surprise off-cycle move.

The unscheduled adjustment by the Monetary Authority of Singapore (MAS), which manages monetary policy through exchange rate settings, puts the city-state on the vanguard of central banks beginning to rein in loose monetary policies that helped stimulate growth amid the pandemic, with the focus now shifting to containing spiraling inflation.

Analysts have described the policy tightening, which slightly raises the “slope” or rate of appreciation of the Singapore dollar policy band to mitigate inflation by allowing the local currency to strengthen against peers, as a pre-emptive move ahead of anticipated interest rate hikes by the US Federal Reserve widely forecasted to begin in March.

“Inflation has been climbing in the US and other parts of the world. By announcing the policy change sooner rather than later, MAS is sending a clear signal to the market that it stands ready to act to bring prices under control,” said Cheryl Chan, senior vice-president for capital markets at digital securities exchange ADDX.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

PS5, Switch and Xbox all short-circuited by scarce chips

Semiconductor crunch and other supply chain disruptions are stalling next-generation revision of top-selling Nintendo console

Demand for video games has surged to unprecedented levels in the era of lockdowns and Covid-19, but finding a new PlayStation 5, Xbox Series X|S and Nintendo Switch is easier said than done. Console manufacturers see no end in sight to global shortages of the cheap but essential chips needed to boost the availability of their coveted gaming machines.

With general-purpose chips for audio, power management and wireless communication functions in short supply in recent months, Japanese electronics makers Sony and Nintendo have made significant downward revisions to their sales targets for the financial year and spoken in stark terms about the turmoil in their operations caused by chip shortages.

“Judging by recent statements and projections made by the top management at Microsoft, Sony and Nintendo, things will continue to look bad at least into the second half of 2022,” said Serkan Toto, founder of Tokyo-based game industry consultancy Kantan Games, who added that semiconductor shortages may only begin to ease in 2023.

Industry analysts say console manufacturers may substitute certain components for readily available alternatives in the months ahead to cope with the supply crunch, and that the release of next-generation hardware, including a rumored more powerful revision of the top-selling Nintendo Switch console, could be held up until supply chain disruptions are resolved.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Singapore’s chip revival hinges on a wobbly China

City-state’s electronics and semiconductor exports are booming but Covid-hit China holds the key to sustained demand

Singapore’s economy expanded at its fastest pace in over a decade in 2021, a rebound from the city-state’s worst-ever recession led in large part by a manufacturing sector that fired on all cylinders to meet soaring global demand for electronics products as well as semiconductors.

The city-state’s economy expanded 7.2% last year, a robust bounce from a pandemic-induced 5.4% contraction in 2020. Singapore’s manufacturing sector expanded 12.8% compared to 7.3% the previous year, while exports rose 24.2% in November, the largest gain in nearly a decade. Exports are estimated to have grown by 10% year on year in 2021.

Electronics output alone grew 16.5% in the first 11 months of last year compared to the same period in 2020. Yet while the island nation’s broad economic recovery seems poised to continue in 2022, economists say its manufacturing-led momentum may have already peaked amid incipient signs and warnings of a slowdown.

In particular, cost pressures from rising input prices and skyrocketing freight costs are intensifying for electronics manufacturers. More significantly, perhaps, the specter of a potential slowdown in demand from China – Singapore’s largest trading partner – caused by Beijing’s “zero-Covid” policy is clouding the trade-reliant city-state’s outlook.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.