Singapore Leaves Monetary Policy Setting Unchanged

The Monetary Authority of Singapore (MAS) tightened its policy stance for the first time in three years on Tuesday, in a widely expected move, as it braces for potential economic fallout from the Middle East conflict. The central bank slightly increased the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) band, while keeping its width and centre unchanged. Policymakers expect Singapore’s GDP growth to ease this year, with output gap averaging around zero. At the same time, rising imported energy costs and broader price pressures are likely to lift MAS Core Inflation in the near term. Forecasts for both MAS Core Inflation and CPI-All Items inflation were raised to 1-1/2% to 2-1/2% from 1% to 2.0%. Private transport costs are set to increase due to higher fuel prices, offset by softer inflation in accommodation. MAS stressed it remains well-positioned to safeguard medium-term price stability and stands ready to curb excessive volatility in the S$NEER.

The Monetary Authority of Singapore (MAS) held monetary policy steady for a third consecutive review on January 29, 2026, maintaining the slope, width, and center of the Singapore dollar nominal effective exchange rate (S$NEER) policy band. However, the central bank lifted its 2026 inflation outlook, projecting both core and headline inflation at 1%–2%, up from the previous forecast range of 0.5%–1.5%. The policy board assessed that risks to both growth and inflation are tilted to the upside, noting that persistently stronger-than-expected economic growth could fuel faster wage gains and improve consumer sentiment, thereby adding to inflationary pressures. In addition, ongoing geopolitical developments may push up imported costs. MAS also said economic growth is likely to remain resilient in 2026, while underlying price pressures are gradually returning closer to their long-term trend.

The Monetary Authority of Singapore (MAS) left its monetary policy unchanged on Tuesday, maintaining the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) band, with no change to its width or centre. Having eased policy twice this year, the central bank said it remains well-positioned to respond to risks to medium-term price stability and is closely monitoring global uncertainties. Advance estimates showed the country's Q3 GDP rose 1.3% qoq, slightly below Q2’s 1.5% but above expectations, supported by manufacturing and domestic demand despite U.S. tariff headwinds. Year-on-year growth moderated to 2.9% from 4.5%. MAS expects growth to ease as trade-related sectors normalise, though AI investment, infrastructure spending, and financial conditions should support activity. GDP is projected to return to near-trend in 2026, with core inflation averaging 0.5% in 2025 and rising to 0.5–1.5% in 2026.