Singapore: MAS increases the S $NEER slope "very slightly": Expect another very slight slope increase in October

Research evidence excerpt

Singapore: MAS increases the S $NEER slope "very slightly": Expect another very slight slope increase in October

Siddharth Jamad Asia Pacific Economic Research J P M O R G A N(65) 6807-5503 27 July 2026

siddharth.jamad@jpmorgan.com

Moreover, despite continuing to stress upside risks to inflation as we had expected, the MAS

left its 2026 headline and core inflation forecasts unchanged at 1.5%-2.5%oya (JPMf core

CPI: 1.9%oya). Nevertheless, the central bank maintained that risks to inflation are tilted to

the upside. However, in addition to upside inflation risks from a renewed surge in global

energy prices, the MAS also underscored the risk of more persistent inflation “if robust

investment growth generates greater demand spillovers abroad and in Singapore.”

The unusually small-sized policy move, in our view, reflects a re-calibration of the policy

response to inflation pressures as growth fears recede: With the MAS leaving its CPI

forecast range unchanged, we think its decision to tighten its policy stance further relative to

April reflects its greater confidence that growth will remain strong in the near-term, which,

together with volatile but elevated energy prices, biases inflation risks more firmly to the

upside. In contrast, the growth-inflation tradeoff from the unfolding Middle East conflict was

more uncertain in April. But the current set-up for high future inflation—high energy prices,

strong growth—contrasts with as-of-yet contained inflation pressures, allowing the MAS to

adopt a more patient and incremental approach to policy tightening.

Indeed, in calling for a policy hold today, we had expected the MAS to demonstrate patience

amid still-benign core inflation. Instead, we were on the lookout for any changes in this