MAS hikes inflation forecast to 1%-2% as it holds monetary policy

Central bank holds policy as growth outlook strengthens

The Monetary Authority of Singapore (MAS) left its monetary policy settings unchanged at its January review, keeping the current slope, width, and centre of the Singapore dollar nominal effective exchange rate (S$NEER) band.

This marks the third consecutive meeting with no policy change.

The S$NEER is the primary tool the MAS uses to manage monetary policy, focusing on an undisclosed, trade-weighted basket of currencies to control inflation rather than interest rate.

MAS also raised its inflation forecast for 2026, projecting both core and headline inflation at 1% to 2%, up from the earlier range of 0.5% to 1.5%.

The central bank said recent economic growth has been stronger than expected, which could lead to firmer cost pressures and wages next year.

MAS added that risks to growth and inflation are tilted to the upside but said current policy settings remain appropriate.

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