Market expectations indicate that the Monetary Authority of Singapore (MAS) will tighten monetary policy in April by increasing the slope of the Singapore dollar nominal effective exchange rate (SGD NEER) policy band by 50 basis points to 1.0%. A further tightening of the same magnitude is possible in July.

Inflationary pressures from rising energy prices, combined with strong economic growth momentum, support the case for policy tightening. Singapore's GDP is projected to grow by 5% in 2025, with the growth trend continuing into 2026. Core inflation rose 1.4% year-on-year in February, exceeding the median forecast, while headline inflation stood at 1.2%. The central bank has raised its 2026 inflation forecast range from 0.5%–1.5% to 1.0%–2.0%, citing increasing labor and energy costs.

Analysts estimate that if oil prices exceed $100 per barrel, core inflation could rise by an additional 0.5 percentage points. Although Purchasing Managers' Index (PMI) data and electricity demand show resilience, persistently high oil prices could weigh on the economic outlook.

In February, Singapore revised its 2026 GDP growth forecast range upward from 1.0%–3.0% to 2.0%–4.0%. However, relevant authorities have indicated that growth expectations could be revised downward in April due to global supply chain disruptions and volatility in energy markets.

On the exchange rate front, the MAS's tightening measures are expected to temporarily lower the USD/SGD exchange rate, after which it may enter a consolidation phase. In the near term, the exchange rate is projected to remain within the range of 1.27–1.29, with an overall stable range of 1.25–1.30 expected through 2026.