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MAS allows stronger Singapore dollar for second straight quarter to fight persistent inflation

Published July 27, 2026 at 8:02 AM UTC

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The Monetary Authority of Singapore (MAS) tightened monetary policy for the second consecutive quarter on Friday, allowing the Singapore dollar to strengthen further against a basket of currencies. The move aims to combat inflation that remains stubbornly high, partly fueled by geopolitical tensions including the Iran war-induced supply disruptions. MAS now expects core inflation to stay above its target range until early 2027, longer than previously forecast. The decision means the Singapore dollar will continue to appreciate gradually, helping to reduce the cost of imported goods and services. The central bank uses the exchange rate as its primary policy tool, adjusting the slope of the Singapore dollar's trading band to control price pressures. This back-to-back tightening underscores MAS's focus on anchoring inflation expectations even as economic growth faces headwinds from global uncertainty. For consumers, the stronger currency may help cool rising prices at the checkout counter, but it could also make Singaporean exports more expensive in foreign markets. Businesses in trade-dependent sectors, such as electronics and pharmaceuticals, will need to adapt to sustained currency strength. Analysts note that MAS's decision was widely expected after inflation data showed a continued upward trend. The central bank reiterated that it stands ready to adjust policy if the inflation outlook changes materially. The next policy review is scheduled for October 2025.