Singapore central bank maintains monetary policy, keeps S$NEER band unchanged

The Monetary Authority of Singapore (MAS) has kept its monetary policy unchanged, retaining the Singapore dollar nominal effective exchange rate (S$NEER) band following two consecutive hikes. In a recent statement, MAS projected that Singapore's economy will continue to expand at a robust pace in the near term, with a gradual slowdown expected as the artificial intelligence (AI) cycle eases and global financial conditions tighten.

Core inflation is anticipated to moderate significantly from mid-2025, with an average range of 1.5 to 2.0 per cent in 2026, while the Consumer Price Index (CPI)-all items inflation is expected to settle around 2.0 per cent. For the upcoming year, MAS's core and CPI-all items inflation rates are projected to average between 1.5 to 2.5 per cent.

MAS's decision to maintain the current appreciating policy band will help strengthen the S$NEER and counteract the expected near-term rise in imported inflation, thereby facilitating the gradual easing of inflationary pressures in 2027. The central bank affirmed its readiness to respond effectively to any risks to medium-term price stability and will continue to monitor economic developments closely.