Singapore is widely expected to keep its monetary policy settings unchanged at a scheduled review on Thursday, with most economists pointing to healthy growth supported by semiconductor exports and inflation that remains under control.
In a Reuters poll of 16 analysts, 15 predicted the Monetary Authority of Singapore - MAS - will refrain from altering its policy stance this week. The central bank left its settings untouched in July and October of last year, after implementing easings in January and April.
Economic data have shown stronger-than-anticipated momentum. Singapore's gross domestic product expanded by 4.8% in 2025, exceeding the government's November forecast of about 4.0% and topping an earlier estimate of 1.5% to 2.5%.
Analysts point to the technology sector as a key driver. The country's electronics purchasing managers' index registered 50.9 in December, indicating that the tech cycle retained momentum, according to Tay Qi Hang, an Asia analyst at the Economist Intelligence Unit. He highlighted that demand tied to artificial intelligence applications and rising memory chip prices should continue to support the semiconductor industry over the coming months.
"The Q4 2025 growth outperformance coupled with stable core inflation at just above 1% in November has reduced near-term pressure to ease," Tay said.
Views differ on the timing of any future policy shifts. Edward Lee, chief economist at Standard Chartered, said there is no urgency for MAS to adjust settings at this month's review given that inflation is contained. Lee nonetheless expects the central bank to move toward a tighter stance at its April review as the inflation cycle bottoms out and trade uncertainties subside.
By contrast, economists at Bank of America argued in a report released on Friday that MAS could choose to tighten policy as soon as Thursday, pointing to signs that inflation strengthened in December. The Bank of America team said MAS might raise its core inflation forecast range for 2026 by 50 basis points - to between 1% and 2% from the current 0.5% to 1.5% range.
Those economists noted that price increases in travel-related components and other categories more than offset declines in raw food and beverage prices, a dynamic that influenced their assessment. MAS is scheduled to update its inflation forecasts in the forthcoming monetary policy statement on Thursday.
Singapore manages its monetary environment through exchange rate policy rather than an explicit interest rate target. The central bank allows the Singapore dollar to appreciate or depreciate against a basket of currencies from its main trading partners within an undisclosed trading band - the Singapore dollar nominal effective exchange rate, or S$NEER. MAS can alter monetary settings by adjusting three levers: the slope, the mid-point and the width of that band.
Global central bank dynamics also factor into market expectations. Major central banks are expected to keep policy rates steady in the near term, though concerns persist in financial markets about the independence of the U.S. Federal Reserve. The Fed cut interest rates by 25 basis points at its December meeting but signalled that further easing would be paused pending clearer information on the jobs market, inflation and the broader economy.
U.S. political pressure on the Fed has been visible, with President Donald Trump repeatedly criticising Fed chair Jerome Powell for not lowering rates more aggressively. In Europe, the European Central Bank's chief economist Philip Lane said in January that the ECB will not consider any rate change in the near term if the economy stays on course.
This policy backdrop and the domestic growth-inflation mix will be central to MAS's decision-making and will shape reactions across foreign exchange markets, the financial sector and export-oriented industries, particularly semiconductors.