SINGAPORE: The Monetary Authority of Singapore (MAS) is expected to tighten monetary policy on Tuesday (Apr 14) as the Middle East conflict and energy disruption threaten to push prices higher.
According to a Bloomberg survey published on Friday, 15 of 18 economists expect the central bank to tighten policy this week. Three expect no change and none forecast easing. The survey was conducted between Mar 27 and Apr 9.
MAS has not adjusted policy since April 2025, when it eased in response to the brewing US-China trade war.
With inflation expected to accelerate alongside rising energy prices, most analysts see the central bank tightening policy at least once this year. Some also expect a second move in July or October.
Tightening means MAS is effectively allowing the Singapore dollar to appreciate, making imports cheaper and helping to keep inflation in check.
Bank of America (BofA) Securities said it expects MAS to steepen the S$NEER slope – allowing the currency to strengthen at a faster pace – a move likely to be anticipated by markets.
“We expect the policy tone to be broadly balanced, as MAS continues to weigh near-term inflation risks against medium-term growth concerns,” analysts said in a report dated Apr 8.
BofA Securities said it “leans towards” a second policy move in July, though with high uncertainty.
Even before the conflict began, some economists expected MAS to tighten policy in April.
“After the energy shocks, there is a stronger case for the MAS to move, given rising inflation risks,” HSBC analysts said in an Apr 7 report.
The bank expects tightening in April, a pause in July and another tightening in October.
“The reason why we are not anticipating a back-to-back tightening move is that the MAS will likely take the time to assess the impact before moving again,” said Ms Yun Liu, senior ASEAN economist at HSBC.
HOW MAS TIGHTENS POLICY
Most central banks manage monetary policy through interest rates, but Singapore does so through exchange rates. MAS lets the Singapore dollar strengthen or weaken against currencies of the country’s main trading partners within an undisclosed band.
It can change the slope, mid-point or width of the band.
Fifteen of the 18 economists surveyed by Bloomberg expect the slope to be made steeper.
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