- The MAS kept all three parameters of the SGD NEER policy band unchanged in October.
- Advance GDP growth in 3Q25 surprised positively, despite slowing to 2.9% YoY and 1.3% QoQ sa.
- We expect slower GDP growth of 1.8% in 2026 from a revised 3.5% in 2025 due to tariff headwinds.
- The MAS expects core inflation to rise gradually in 2026, consistent with prevailing policy.
- We see no urgency for the MAS to adjust policy and retain the option of an insurance easing in 2026.
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SGD NEER policy unchanged in October – MAS continues to keep the powder dry
The Monetary Authority of Singapore (MAS) kept all three parameters of the SGD NEER policy band unchanged at its October review. While we correctly anticipated that the SGD NEER would ease from the top of its policy band, it did not fall towards the mid-point, and instead held in the upper quartile, according to our model.
The MAS’s decision to stay on hold came alongside stronger-than-expected growth momentum in the Singapore economy. Advance 3Q25 GDP expanded 1.3% QoQ sa (2.9% YoY) in 3Q25, beating the consensus forecasts of 0.6% QoQ sa (2.0% YoY). Growth for 2Q25 was revised higher to 4.5% YoY from 4.4%, reflecting resilience in both manufacturing and services (see details on page 2 and 3 of the PDF report).
Despite the heightened uncertainty from US President Donald Trump’s renewed tariff measures, the global economy proved more resilient than initially feared. The IMF observed that 188 out of its 191 member states (including Singapore) chose not to retaliate against the US tariffs, allowing global supply chains to adapt with an agile private sector.
The prevailing SGD NEER policy settings are consistent with the MAS’s assumptions that: 1) the output gap to remain positive through 2025 before narrowing to around 0% in 2026; 2) core inflation will rise gradually from around 0.5% this year to 0.5-1.5% in 2026, and 3) headline CPI inflation will average 0.5-1.5% in 2026 compared to 0.5-1.0% this year (see details on page 3 and 4 of the PDF report). The Ministry of Trade and Industry will release updated GDP forecasts for 2025 and 2026 in November.
Against this background, we see no urgency for the MAS to adjust policy and retain the option of an “insurance easing” in 2026. While the impact of the US tariffs has been “contained”, downside risks persist. They include the contentious US-China trade relations, as well as Trump’s tariffs on semiconductors and pharmaceuticals, which keep alive the risk of a sharper-than-expected slowdown in the world economy.
Our USD/SGD view remains unchanged, with the pair expected to trend lower into the 1.20-1.25 range in 2026 from 1.25-1.30 this year. The USD faces downside risks as the Trump administration gains greater influence over the Federal Reserve after Fed Chair Jerome Powell’s term ends in May 2026. According to the US trade adjustment playbook outlined by US Treasury Secretary Scott Bessent and Fed Governor Stephen Miran, Washington will likely pursue a policy mix of lower interest rates and a more competitive USD to reinforce its tariffs and trade deals.
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Related Insights
- Research Library15 Oct 2025
- Macro Insights Livestream 15 Oct 2025
- Singapore chartbook: Case for an MAS insurance easing 02 Oct 2025