Singapore’s central bank holds currency policy steady as inflation projections climb

Singapore’s central bank just made a decision that sounds boring on paper but carries real weight for anyone paying attention to Asian financial markets. The Monetary Authority of Singapore (MAS) is holding its Singapore dollar policy band steady, projecting both core and headline CPI inflation in the 1.5-2.5% range for 2026. For a city-state where imports and exports exceed 300% of GDP, currency policy isn’t some abstract exercise. It’s the primary lever for controlling prices in one of the world’s most trade-exposed economies. How Singapore’s monetary policy actually works Here’s the thing about MAS: it doesn’t do monetary policy the way most central banks do. While the Federal Reserve and the European Central Bank fiddle with interest rates, Singapore manages the nominal effective exchange rate of its dollar, known as the S$NEER. Think of it as steering the economy by controlling how expensive the currency is relative to a basket of trading partners’ currencies, rather than adjusting the cost of borrowing. The policy band has three adjustable components: the slope (how fast the currency appreciates or depreciates), the width, and the center point. The latest decision keeps all t...