Singapore keeps monetary policy settings unchanged in October, for second straight quarter
Full-year core inflation is now forecast at 0.5%, while the headline inflation range was narrowed lower
[SINGAPORE] The Monetary Authority of Singapore (MAS) kept monetary policy settings unchanged for the second consecutive time in Tuesday’s (Oct 14) quarterly policy meeting, as expected by private-sector economists.
The Republic’s central bank said it will maintain the prevailing rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, with no change to its width and the level at which it is centred.
“MAS is in an appropriate position to respond effectively to any risk to medium-term price stability and will continue to closely monitor economic developments amid uncertainties in the external environment,” it said.
The S$NEER was close to the top of the policy band in August, but has eased in recent weeks as appreciation pressures ebbed, noted MAS.
“On average, the level of the S$NEER since the July policy review has been similar to that in the preceding three months.”
Tuesday’s announcement was in line with economists’ expectations. In a Reuters poll, 10 of 14 economists thought settings would be unchanged. Similarly, of 11 polled by the Wall Street Journal, nine thought MAS would keep its settings.
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This was even as MAS narrowed its full-year 2025 inflation forecasts. Core inflation is now expected at “around 0.5 per cent”, while the headline inflation forecast range was narrowed to between 0.5 and 1.0 per cent.
Both were previously forecast at between 0.5 and 1.5 per cent. (*see amendment note)
MAS said that core inflation “should trough in the near term and rise gradually over the course of 2026 as temporary factors dampening inflation fade”.
More optimistic
The latest move comes after the central bank similarly kept settings unchanged in July. Prior to that, there were two consecutive rounds of easing in the January and April meetings, where it reduced the slope slightly.
Several economists noted on Tuesday that the central bank adopted a more optimistic tone this round compared to its last meeting in July.
For instance, in its July statement, MAS said growth momentum should moderate “while the drags on demand exerted by policy uncertainty intensify”.
In Tuesday’s statement, MAS similarly noted that growth should moderate, but added: “However, the extent of the downturn should be contained.” Maybank economists Brian Lee and Chua Hak Bin pointed to this as an example of greater optimism.
UOB economist Jester Koh similarly saw an emphasis on optimism around growth, as well as a possible hint at “reflationary prospects” heading into 2026.
Following Tuesday’s statement, he now expects MAS to maintain policy settings into 2026, contrary to his earlier expectation of easing in the January meeting.
He noted that in its latest statement, MAS said it was is “in an appropriate position to respond effectively to any risk to medium-term price stability” – adding the word “effectively” to a similar line in its July statement.
Together with MAS’ observation of the S$NEER level staying stable, this suggests a preference to conserve policy space, he added.
Singapore’s core inflation, which excludes accommodation and private transport, eased to 0.3 per cent in August from 0.5 per cent the month before. Headline inflation similarly slowed to 0.5 per cent, down from 0.6 per cent in July.
In August, the Ministry of Trade and Industry upgraded Singapore’s full-year growth forecast range to 1.5 to 2.5 per cent, from 0 to 2 per cent before.
Also released on Tuesday were advance estimates for third quarter growth, which was 2.9 per cent year on year, slowing from 4.5 per cent growth in the previous quarter.
Stronger than expected
MAS noted that Singapore’s economic growth has “turned out stronger than expected”, with the output gap – the difference between real and potential gross domestic product – expected to stay positive through the rest of the year.
But in 2026, as growth slows to a “near-trend pace”, this gap is expected to close, it added.
On inflation, price pressures have eased across most goods and services. This reflects fresh government subsidies for long-term care services, subdued imported costs and moderating domestic cost pressures.
Imported costs of items such as crude oil, capital goods, intermediate inputs, and certain retail products have declined, with this passing through to consumer prices. Unit labour cost growth has also slowed, with weaker wage growth and a pick-up in labour productivity.
*Amendment note: A previous version of this story incorrectly stated that MAS had maintained its forecasts for both core and headline inflation.
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