MAS Tightens Monetary Policy for Second Consecutive Meeting
On Monday, 27 July 2026, the Monetary Authority of Singapore (MAS) announced an unexpected tightening of monetary policy for the second straight meeting. The central bank said it would increase, by a very slight amount, the rate of appreciation of its Singapore dollar nominal effective exchange rate (S$NEER) policy band, while leaving both the width of the band and its midpoint unchanged. The adjustment was described as smaller than the tightening implemented in April.
A Reuters poll conducted prior to the review showed that 12 of 16 economists expected MAS to keep policy unchanged, with only four foreseeing another tightening, underscoring the surprise element of the decision.
MAS projected that core inflation, which had slowed to 1.6% year‑on‑year in June, would pick up from July and remain elevated before easing around the middle of 2027 as external price pressures continue to filter through to domestic prices.
Despite the modest policy shift, Singapore’s economy expanded a stronger‑than‑expected 5.7% year‑on‑year in the second quarter, supported by resilient global demand and continued investment in artificial‑intelligence‑related industries.
Singapore conducts monetary policy primarily through the exchange‑rate mechanism rather than interest‑rate adjustments, allowing the Singapore dollar to move within an undisclosed band to manage imported inflation. Following the announcement, the USD/SGD pair traded largely unchanged.