Singapore: Monetary Authority of Singapore tightens monetary policy in April
MAS tightens monetary policy in April: At its meeting on 14 April, the Monetary Authority of Singapore (MAS) decided to slightly increase the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, likely by about 50 percentage points to around 1%, while keeping the width of the band and the level at which it is centered unchanged. The decision was in line with market expectations.
Central Bank hikes inflation forecasts, flags GDP growth risks: The decision of the MAS reflected a marked deterioration in the inflation outlook following the sharp rise in global energy prices due to the U.S.-Iran war. While core inflation held steady at 1.2% in January–February from Q4, higher costs for hydrocarbons on the global market are expected to now be feeding through to electricity, gas and transport prices in the consumer price basket. Consequently, the MAS raised its projections for both headline and core inflation in 2026 to 1.5–2.5% from 1.0–2.0% previously.
Meanwhile, the MAS noted that Singapore’s economy continued to expand at a “firm” 4.6% year-on-year pace in Q1 2026, supported by global AI-related demand for semiconductors and electronics. However, the MAS expects GDP growth to slow over the course of 2026, as higher energy costs and supply disruptions weigh on economic activity.
Second tightening of monetary policy likely this year: The Central Bank did not provide specific forward guidance on future monetary policy decisions. Still, most of our panelists expect a second tightening of FX policy this year, but they acknowledge that the next move will be more data-dependent; some expect it as early as July, while others see it coming in October.
The next meeting is scheduled by 31 July.
Panelist insight: Commenting on the outlook, EIU analysts affirmed:
“We expect the MAS to keep policy on hold at its next meeting in July as it assesses the impact of recent tightening, with the next move likely to take place at its subsequent meeting in October. However, the policy path will depend on developments in the Iran conflict. Prolonged disruption would raise inflation risks further and could prompt additional tightening, including a possible upward recentering of the S$NEER policy band.”