Source: The Business Times, 14 October 2026
If your electricity bill and your food spending have both crept up since the middle of the year, the numbers agree with you. Core inflation, which leaves out housing and private transport, rose to 2.1% in July and August. In its monetary policy statement on 14 October 2026, MAS decided not to do anything new about it. It kept the Singapore dollar strengthening at the pace it set in July, and it expects core inflation to average 1.5% to 2% this year. Here's what that means for the prices you pay, the Singapore dollar and interest rates here.
Most central banks move an interest rate. MAS doesn't. It steers the Singapore dollar against a basket of the currencies of the countries Singapore trades with. The value against that basket is called the S$NEER, and MAS keeps it inside a band that usually tilts upward, so the Singapore dollar slowly gets stronger.
The band has three settings: how fast it rises (the slope), how wide it is, and where it's centred. On 14 October MAS left all three alone. Since July, the S$NEER has strengthened a little and sits in the upper half of the band, MAS says.
It had already moved twice this year. MAS made the slope slightly steeper in April and very slightly steeper again in July:
Most didn't. The Business Times reported that 17 of 20 economists in a Bloomberg poll had forecast a steeper slope. The other 3 expected no change.
The April move was MAS's first tightening since 2022, the paper said, because higher energy prices from the Middle East conflict were feeding into import costs. Analysts estimate the slope has stood at 1.25% since July.
MAS expects inflation to stay slightly high for the next few quarters. It then expects core inflation to ease more clearly from mid-2027, as imported price rises slow and local costs stay low.
The band set in July still points up. MAS says that lets the S$NEER keep getting stronger and push back on the rise in import prices it expects soon. That, it says, will let inflation ease step by step in 2027.
Growth is still firm. Advance estimates from the Ministry of Energy, Trade and Industry (METI) put growth at 5.4% in the third quarter, compared with a year earlier. Tech-related sectors led the way.
Against the second quarter, after seasonal adjustment, growth was 1.1%, a little slower than the quarter before. MAS expects AI-related activity to slow in the second half of 2027.
Yes. MAS expects higher import costs to keep both core and headline inflation slightly raised in the months ahead.
From mid-2027, MAS expects core inflation to ease. That means prices rise more slowly, and they still rise: MAS forecasts both measures at 1.5% to 2.5% in 2027.
Core inflation leaves out what you spend on accommodation and private transport. Headline inflation, which MAS calls CPI-All Items inflation, counts them.
MAS narrowed its 2026 core forecast. Here are its forecasts for this year and next:
| Measure | 2026 | 2027 |
|---|---|---|
| Core inflation | 1.5% to 2% (was 1.5% to 2.5%) | 1.5% to 2.5% |
| Headline inflation | Around 2% | 1.5% to 2.5% |
Core inflation rose to 2.1% in July and August, from 1.5% in the second quarter. MAS says higher import costs spread to more goods and services:
Energy prices have climbed again since September, and MAS expects them to stay high for now. It also expects food prices around the world and in the region to rise, because it costs more to produce food and bad weather is hurting harvests.
The check that matters for you is whether your pay is keeping up. The Singapore inflation rate calculator does that sum for you. Our guide to Singapore's average salary by age has the pay figures, and our guide to Singapore's inflation rate in 2026 has the monthly readings.
Singapore buys a lot from abroad. MAS says almost 40 cents of every dollar spent here goes on imports, and gross exports and imports come to more than 300% of GDP.
When the Singapore dollar gains against the currencies of the places we buy from, those imports cost fewer Singapore dollars. MAS says almost all of a currency move shows up in import prices, and from there in what you pay at the shops, after a delay.
MAS says that in an economy this open, the exchange rate moves inflation far more than interest rates would, which is why it uses one and not the other. It tracks the basket, not the rate against one currency, because the basket better reflects who Singapore trades with.
No. Most central banks target an interest rate, but MAS targets the exchange rate. It says its exchange rate policy is Singapore's only form of monetary policy.
MAS says interest rates here are largely set by global interest rates and by what currency markets expect of the Singapore dollar.
In its statement, MAS says higher interest rates, with inflation still high in advanced economies, would weigh on global demand.
MAS says the outlook is still very uncertain. "For now, the risks to inflation remain tilted to the upside," it said. It lists what could push inflation either way:
METI will announce its GDP growth forecasts for 2026 and 2027 in November. MAS issues its monetary policy statements four times a year, in January, April, July and October.
MAS says it is well placed to act on any risk to medium-term price stability. It will keep watching the economy closely, it added.
Our guide to the IMF cost of living warning covers why food and energy price jumps can last.
Neither. MAS doesn't target an interest rate. On 14 October 2026 it kept every setting of its S$NEER policy band unchanged, after raising the slope in April and again in July.
MAS now expects core inflation to average 1.5% to 2% in 2026, narrowed from 1.5% to 2.5%. It expects headline inflation of around 2% this year, and 1.5% to 2.5% for both measures in 2027.
MAS expects core inflation to stay slightly raised in the coming quarters. It then expects it to ease more clearly from mid-2027, as import costs fall and local price pressures stay low.
MAS has issued a monetary policy statement four times a year since 2024. Before that, from October 2003 to October 2023, it issued them twice a year, in April and October.
This is general financial information for Singapore, not personal financial advice. Figures change, so verify current rates against the official sources above before acting. See our full disclaimer.
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