Barclays projects that the Singapore dollar's nominal effective exchange rate (SGD NEER) will stay on the stronger side of the Monetary Authority of Singapore's (MAS) policy band in the near term, trading roughly 125 to 150 basis points above the policy midpoint as the US dollar shows signs of softness into the summer.
The bank points to a combination of forces supporting SGD NEER resilience: a broader narrative that reduces the dollar risk premium and continued foreign capital inflows. These factors, Barclays says, should help keep the SGD NEER elevated relative to the MAS midpoint over the short horizon.
Policy-setting by the MAS remains a central determinant of the path for the SGD NEER. In April, the MAS set the pace of the SGD NEER to target an annual slope gain of 100 basis points. Barclays notes that any substantial additional upside to the SGD NEER hinges on forthcoming inflation data over the coming months - a point it identifies as critical for whether the MAS' measured approach must be adjusted.
Since January 2026, Barclays has maintained the view that for the SGD NEER to experience sustained gains comparable to the 2021-22 tightening cycle, market participants would need to assign higher probabilities to consecutive, rapid or more aggressive foreign-exchange policy tightening. Barclays describes the mechanism for such tightening as likely taking the form of upward re-centering moves in the MAS' policy framework.
Barclays adds that signs of more pervasive or persistent inflation - particularly inflation that would sustainably push core inflation beyond the MAS' target range - could justify policy steps beyond the current measured stance. The bank also notes, however, that de-escalation in the Middle East has lowered those inflation-related risks.
On the timing of potential policy adjustments, a Barclays economist expects the MAS to maintain its current stance through the remainder of 2026. Nonetheless, the firm assesses that risks are tilted toward an additional 50 basis point increase in the policy slope at some point, with October viewed as a more likely window for such a move than July. Barclays stresses that positioning around the SGD NEER remains tactical for market participants.
Finally, Barclays points out that the MAS tends to adopt a more activist position on the appropriate strength of the SGD NEER when it forms strong convictions about the underlying economic backdrop. That conditional approach underscores the importance of incoming macro data for any future re-centering or steeper slope adjustments.