MAS Holds SGD Policy Steady as Inflation Outlook Cools

Key Moments

Policy Stance on the Singapore Dollar

DBS Group Research economists, led by Chua Han Teng, report that the Monetary Authority of Singapore (MAS) kept its Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) policy band unchanged at the October 2026 review. This decision followed two earlier tightening moves this year.

The research team notes that MAS opted to pause further tightening as inflation in 2026 has been lower than previously projected. Policymakers also expect that current, slightly elevated price pressures will ease from the middle of 2027.

Details of the October MAS Decision

According to the economists, MAS maintained all parameters of the SGD NEER policy band at the October 14 review, following an incremental tightening trajectory earlier in the year.

The decision is summarized in the following statement from DBS Group Research: “The Monetary Authority of Singapore (MAS) did not tighten its SGD policy a third time this year.”

They further highlight: “The SGD NEER policy band’s slope, width, and mid-point were left unchanged at the October 14 review, following a ‘very slight’ increase in the slope in July, which was less than the pace of the ‘slight increase’ in April.”

Inflation and Growth Outlook

DBS Group Research underscores that MAS remains attentive to inflation risks but anticipates a moderation in underlying pressures over time. As cited from MAS views: “Policymakers expect slightly elevated underlying price pressures in the near term, but see them easing more discernibly from the middle of 2027.”

On the growth front, advance data point to a firm performance in the latest quarter. DBS notes: “Concurrently, economic growth in 3Q26 based on advance estimates was robust, but a steady expansion in the coming quarters would still result in a narrower positive output gap, capping underlying inflationary pressures.”

DBS Revisions to Singapore Forecasts

Reflecting the stronger recent momentum, DBS Group Research has adjusted its macroeconomic projections for Singapore. The economists state: “We account for stronger-than-expected expansion in the first three quarters of 2026, and our expectations for normalised but firm and above-potential growth in the coming quarters.”

Alongside this growth reassessment, DBS has also revised its inflation forecasts higher, even as it concurs with MAS that inflationary pressures are likely to moderate from mid-2027.