The Monetary Authority of Singapore (MAS) announced on Thursday that it will keep its monetary policy settings unchanged, a decision that aligned with market expectations. The central bank said it will preserve the current rate of appreciation applied to the Singapore dollar nominal effective exchange rate (S$NEER) and will not alter the width or centre of the policy band.
In its accompanying statement, MAS highlighted a shift in risk orientation, saying that "the risks to the growth and inflation outlook are tilted to the upside at this point." The authority cautioned that "persistently stronger-than-expected GDP growth could lead to higher wage growth and boost consumer sentiment, exacerbating demand-pull inflationary pressures."
Analysts had largely expected MAS to hold policy steady. The prevailing view cited Singapore's resilient growth backdrop, underpinned in part by semiconductor exports, as a reason for the pause.
The decision follows preliminary government data released earlier this month showing that Singapore's economy expanded by 4.8% in 2025, a pace that exceeded the government's forecast of about 4.0%. Alongside the stronger growth figure, core inflation was recorded at 1.2% year-on-year in December.
By maintaining the current S$NEER trajectory and the existing policy band parameters, MAS signalled that it considers the present settings appropriate for prevailing conditions while remaining alert to upside risks. The bank's explicit emphasis on the possibility that persistent stronger GDP could feed into wage growth and consumer confidence frames a potential pathway for future inflationary pressure.
For markets and sectors, the statement ties macro developments to domestic demand and labour-cost dynamics. If the upside risks MAS flagged materialise, they would directly influence consumer-facing sectors and labour-sensitive industries via wage movements, and could affect financial markets through shifts in interest rate expectations and FX valuation pressures.
Summary
The MAS held its exchange rate-based policy unchanged, keeping the S$NEER's rate of appreciation and the policy band's width and centre steady. It warned that upside risks to growth and inflation remain, specifically noting that sustained stronger GDP could raise wages and consumer sentiment and amplify demand-pull inflation. Recent preliminary data showed 4.8% GDP growth in 2025, above the government's forecast of around 4.0%, and core inflation at 1.2% year-on-year in December.