Singapore’s central bank unexpectedly raised the SGD NEER slope for the second meeting, citing persistent inflation risks despite benign price trends.
The Monetary Authority of Singapore (MAS) tightened monetary policy for the second consecutive meeting, increasing the appreciation rate of the SGD Nominal Effective Exchange Rate (NEER) band slightly. The move was smaller than April’s adjustment, with no changes to the band’s center or width.
MAS could have kept policy unchanged given relatively stable inflation and lower energy prices. However, the decision underscores heightened concerns over inflation risks rather than growth, despite stronger-than-expected 6% H1 2026 growth. Official forecasts for 2026 remain at 2-4% for GDP and 1.5-2.5% for inflation.
USD/SGD dipped modestly to around 1.2890 following the announcement, reflecting limited market reaction to the incremental tightening step.