Singapore Markets: MAS’s surprise pause puts focus on underlying inflation
Did not tighten a third time.
Group Research - Econs14 Oct 2026
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The Monetary Authority of Singapore did not tighten its SGD policy a third time this year. The SGD NEER policy band’s slope, width, and mid-point were left unchanged following a “very slight” increase in the slope in July, which was less than the pace of the “slight increase” in April. The pause likely reflected a softer-than-expected 2026 inflation outlook. Compared to July’s forecast of 1.5-2.5% for 2026, headline and core CPI inflation are now expected to moderate to 2% and 1.5-2.0%, respectively.

MAS likely kept the door open for another calibrated tightening if needed. It reiterated the profile for CPI-All Items and Core inflation to average 1.5-2.5% in 2027, with inflation staying elevated from the renewed increase in energy prices recently before moderating discernibly from the middle of 2027, due to easing supply commodity disruption, with risks from higher-than-expected global interest rates or a sharper pullback in AI-related investment weighing on the global and domestic economy.

USD/SGD’s resilience underscores the measured impact of MAS tightening. The pair has been remarkably stable within a 1.26-1.30 range despite two MAS tightenings in April and July and the Fed’s September hike. The impact of MAS policy is better reflected in USD/SGD’s stability even as the DXY Index climbed to an 18-month high.

Philip Wee

Senior FX Strategist - G3 & Asia
philipwee@dbs.com

Chua Han Teng, CFA

Senior Economist - Asean
hantengchua@dbs.com



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