Singapore’s central bank unexpectedly tightened monetary policy for the second meeting, adjusting the SGD NEER slope amid inflation concerns.
The Monetary Authority of Singapore (MAS) tightened monetary policy for the second consecutive meeting, increasing the slope of the Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) band slightly. The band’s centre and width remained unchanged, signaling heightened concern over inflation risks despite softer energy prices and benign data.
MAS’s move was smaller than its April tightening, with core and headline inflation forecasts for 2026 held at 1.5-2.5%. The official inflation forecast is expected to be revised upward from the current 2-4%. Growth in H1 2026 exceeded expectations at 6%, supporting the decision.
USD/SGD dipped modestly to around 1.2890 following the announcement, reflecting limited market reaction. The pair had traded near 1.2910 earlier in the session.