Singapore (VNA) – The Monetary Authority of Singapore (MAS) is likely to tighten monetary policy at its upcoming review on April 14, as rising energy prices and geopolitical tensions in the Middle East increase inflationary pressures, economists say.
According to a survey, 15 out of 18 economists expect MAS to adopt a tighter policy stance, while the remaining analysts believe the authority may keep its policy unchanged.
With global energy prices rising, inflation in Singapore is expected to accelerate, prompting policymakers to take measures to contain price pressures. Singapore manages monetary policy primarily through the exchange rate of the Singapore dollar, allowing the currency to appreciate to help reduce import costs and ease domestic inflation.
Analysts believe MAS is likely to increase the slope of the nominal effective exchange rate band, allowing the Singapore dollar to appreciate at a faster pace. This option is viewed as a more balanced approach compared to stronger measures such as shifting the mid-point of the exchange rate band, which would effectively result in a one-off revaluation of the currency.
Economists at the Bank of America said the upcoming decision is likely to reflect a balanced policy stance as MAS navigates short-term inflation risks and medium-term growth prospects. Some financial institutions also predict that MAS may introduce another policy adjustment in July or October, although uncertainty remains.
Compared with 2022, when inflation surged following the COVID-19 pandemic and the Russia–Ukraine conflict, the current environment is seen as more complex due to potential disruptions in global energy supplies, which could directly affect production costs and household income.
Alongside any policy adjustment, MAS is also expected to raise its inflation forecast for 2026. Some institutions, including the Bank of America and HSBC, predict the forecast could be revised upward from around 1–2% to 1.5–2.5%, while Standard Chartered has already raised its projection to 2.5%.
Earlier on April 7, Deputy Prime Minister and MAS Chairman Gan Kim Yong said the agency was reviewing its monetary policy stance and would soon update its inflation outlook./.
