The Monetary Authority of Singapore (MAS) will maintain the current rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band. The central bank said, in its Jan 29 announcement, that it will not change the band’s width and the level at which it is centred.
“MAS is in an appropriate position to respond effectively to any risk to medium-term price stability and will continue to closely monitor economic developments amid uncertainties in the external environment,” it says.
The move met market expectations, as 19 out of 20 economists polled by Bloomberg had anticipated no change to policy settings. Bank of America (BofA) was the only one that predicted a tightening this week.
The MAS also kept the rate of appreciation of the S$NEER policy band with no changes to the width or level at which it is centred in its October 2025 monetary policy review. The S$NEER has since strengthened in the upper half of the appreciating policy band.
According to MAS, economic activity among Singapore’s major trading partners remained “resilient” in 4Q2025 thanks to the artificial intelligence (AI)-related investment boom and reduction in trade policy uncertainty.
While the central bank expects global growth to “ease modestly” this year due to the lag in the effects of higher tariffs, this could be mitigated by supportive fiscal and monetary policies.
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It adds that the global AI capital expenditure (capex) upcycle should continue at the same speed and “provide strong support for economies plugged into the electronics supply chain”.
Although MAS expects Singapore’s GDP growth to be “resilient”, it notes that uncertainties persist. In 2026, GDP growth is expected to ease on a y-o-y basis with the positive output gap projected to narrow over the course of the year.
“The expansion in the trade-related sectors is likely to be underpinned by continuing near-term strength in the global AI-driven capex cycle,” says MAS. “Growth in non-technology-related segments is also forecast to be firm: financial services should be supported by steady lending and capital market activity, while the construction sector will benefit from a continuing pipeline of public and private projects.”
