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MAS tightens SGD NEER policy band, nudging USD/SGD lower
MAS raised the SGD NEER appreciation rate slightly for a second consecutive meeting, while growth in H1 2026 came in at 6% and inflation forecasts stayed at 1.5% to 2.5% for 2026.
Commerzbank analyst Charlie Lay says the Monetary Authority of Singapore unexpectedly tightened policy again for a second consecutive meeting, increasing the SGD NEER policy band appreciation rate very slightly while keeping the band center and width unchanged. Lay notes MAS emphasized the latest tightening was smaller than the move made in April.
The remarks also highlighted a shift toward greater concern about inflation risks rather than growth. MAS maintained its headline and core inflation forecasts for 2026 at 1.5% to 2.5%, while stronger-than-expected H1 2026 growth of 6% could lead officials to revise the growth outlook higher, currently forecast at 2% to 4%.
On the currency reaction, USD/SGD slipped only modestly after the announcement, falling to around 1.2890, according to Lay’s summary of MAS messaging and market response. FXStreet relayed the view that the tighter stance was comparatively limited, which helped cap the immediate impact on the pair.