The Monetary Authority of Singapore, the central bank, is expected to tighten monetary policy at its policy decision meeting next week. In a Reuters poll, all ten analysts predicted a tightening at the meeting on the 14th. In July, MAS tightened policy contrary to market expectations, stating that it would raise the rate of appreciation, or slope, of the exchange-rate-based policy band known as the Singapore dollar nominal effective exchange rate, or S$NEER, very slightly, while leaving the width and midpoint level of the policy band unchanged. It also tightened policy in April. OCBC economist Selena Ling noted that the widening conflict in the Middle East could spread sticky inflationary pressures across goods and services broadly, and that there are upside risks to core inflation, adding that the risk of a "super El Nino" could push food prices even higher. Barclays economist Brian Tan said that with the "overwhelming scale of the artificial intelligence boom" supporting relatively solid gross domestic product growth through 2027, he expects MAS to again raise the slope of the exchange rate policy band by a small adjustment of 25 basis points, adding, "However, the pass-through from economic growth to prices appears to be slower than MAS assumed, and the central bank will likely continue to refrain from more aggressive tightening."
Barclays PLCMAS expected to tighten policy by raising the S$NEER slope, strengthening the Singapore dollar
