MAS Announces Second Consecutive Tightening
On Monday, 27 July 2026, the Monetary Authority of Singapore (MAS) unexpectedly tightened monetary policy for a 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 smaller than the tightening delivered in April.
Market Expectations and Reaction
A Reuters poll conducted before the review showed that 12 of 16 economists expected MAS to leave policy unchanged, with only four forecasting another tightening, making the decision a surprise to markets. Following the announcement, the USD/SGD pair traded largely unchanged.
Inflation Outlook
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.
Economic Growth
Singapore’s economy expanded 5.7% year‑on‑year in the second quarter, stronger than expected, supported by resilient global demand and continued investment in artificial‑intelligence‑related industries.
Policy Mechanism
Singapore manages monetary policy through the exchange rate rather than interest rates, allowing the Singapore dollar to strengthen or weaken within an undisclosed policy band to contain imported inflation.