Singapore: Monetary authority of Singapore stands pat in October
No changes in monetary policy: At its meeting on 14 October, the Monetary Authority of Singapore (MAS) decided to maintain the prevailing rate of appreciation of the Singapore dollar’s nominal effective exchange rate (S$NEER) policy band, with no changes to its width or the level at which it is centered. The decision was in line with market expectations.
Stable inflation and GDP growth call for no changes in monetary policy: The MAS’ decision was driven by two main factors: Inflation and economic growth. On the inflation front, price pressures remained stable and muted in recent months, reflecting both subdued imported and moderating domestic cost pressures. In terms of economic growth, the MAS highlighted a stronger-than-expected economic performance, with the output gap expected to remain positive through 2025, signaling a balanced expansion.
Monetary policy to be more accommodative ahead: The MAS did not provide specific forward guidance on future monetary policy decisions. That said, the majority of our panelists expect easing to resume in 2026 as the external sector will face headwinds due to higher U.S. protectionism. However, uncertainty around the magnitude and timing of the easing remains elevated.
The MAS will reconvene no later than 30 January 2026.
Panelist insight: Commenting on the outlook, analysts at Nomura stated:
“Overall, because we project a slowing of global growth in 2026, Trump policy uncertainty (including possible additional tariffs on China, pharmaceuticals and semiconductors), risks of a severe deterioration in the US labour market and subdued Singapore core inflation, we believe risks remain towards the MAS easing FX policy in the meetings ahead. The timing and extent of MAS’s FX policy easing will be dependent on how fast and severe the external sector weakens.”