INFLATION AND MONETARY POLICY Inflation in Singapore has been within expectations—on a modest uptrend but still below historical norms. MAS Core Inflation this year is expected to average in the upper half of the 1–2% forecast range. Core inflation averaged 1.5% in the first five months of 2018, up slightly from 1.4% in Q4 last 4 / 11  BIS central bankers' speeches  year, mainly due to higher retail inflation. It is projected to rise gradually over the course of 2018, with the gradual absorption of remaining slack in the labour market and the attendant pickup in domestic demand. CPI-All Items inflation is similarly projected to be in the upper half of the 0–1% forecast range for 2018 as a whole. Accommodation costs are forecast to decline less sharply than last year, while private road transport inflation is expected to fall. MAS’ inflation forecasts are robust to alternative outcomes for key external prices, including the upsides to global oil prices. MAS has revised its global (Brent) oil price assumption to an average of $ per barrel for the year as a whole, up from $ previously. MAS undertook a measured tightening of monetary policy in April this year after keeping to a neutral stance for two years. The slope of the $ nominal effective exchange rate policy band was increased slightly, consistent with a modest and gradual appreciation path. The gradual normalisation of monetary policy was appropriate in the context of the continued mild ascent of core inflation since H2 2016.
We are making headway in our strategy to position Singapore as an e-trading hub for FX, facilitating better price discovery during Asian hours and better execution for players in the region. XTX Markets, a global FX liquidity provider, has announced its plans to set up its pricing and trading engine in Singapore. We are working with other key banks and e-trading platforms in the pipeline. JOBS AND SKILLS Let me move on to the second pillar of the ITM—jobs and skills. More finance professionals are going for training and development. Some 27,000 financial industry professionals have benefited from SkillsFuture programmes during 2016-2017. There remains, however, a shortfall of specialised talent in IT—which we are addressing in two ways: MAS, IMDA, the Institute of Banking and Finance and institutes of higher learning are working together to deepen the local IT talent pool at the entry level. IBF is engaging financial institutions on developing local IT talent through company-led training and professional conversion programmes (PCPs). We have ramped up efforts to reskill and redeploy banking professionals into emerging roles. Job roles are changing as banks pivot towards digital banking models over time. We must ensure that our banking professionals can take on these new roles. More than 3,000 consumer banking employees will be reskilled through a PCP over the next two years, acquiring relevant skills in sales, product development, and digital engagement.