Brown Brothers Harriman’s (BBH) Elias Haddad notes that USD/SGD is consolidating around 1.2900 after pulling back from near 1.3000, as the Monetary Authority of Singapore (MAS) unexpectedly tightened policy for a second consecutive meeting. MAS slightly increased the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) slope while leaving band parameters unchanged, and Haddad sees scope for further tightening this year ahead of the next decision in October.

Back-to-back MAS moves support SGD

“USD/SGD is consolidating around 1.2900, down from a multi-month high of almost 1.3000 on June 24. The Monetary Authority of Singapore (MAS) unexpectedly tightened policy for a second straight meeting because “external price pressures are expected to persist and pass through more broadly to domestic consumer prices in the period ahead.””

“Still, the extent of this tightening is smaller than at its last meeting in April.”

“MAS noted it will increase the slope (or rate of appreciation) of the Singapore dollar nominal effective exchange rate (S$NEER) policy band “very slightly” vs. “slightly” in April.”

“The width and midpoint of the policy band were left unchanged.”

“Only four out of 18 analysts in a Bloomberg survey expected a change to the slope of the S$NEER. MAS has scope to tighten policy further this year as it projects the economy’s positive output gap to widen slightly in 2026.”

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)