Singapore Dollar: MAS stance supports resilience – MUFG

MUFG’s Lloyd Chan notes that Singapore’s economy grew 5.4% year-on-year in Q3, moderating from 2Q but beating consensus. MAS left the S$NEER policy band unchanged, expecting AI-related demand to support near-term growth even as the positive output gap narrows. Core inflation is seen slightly above 2% until 1H 2027, with SGD likely to stay relatively resilient.

Stable MAS policy underpins SGD

"Meanwhile, Singapore’s economy expanded 5.4%yoy in Q3, moderating from an upwardly revised 6.2%yoy in 2Q but still exceeding the 5.1%yoy market consensus."

"As highlighted yesterday, MAS maintained the slope, centre and width of the S$NEER policy band, contrary to market expectations for a slight tightening."

"MAS expects AI-related orders and capacity expansion to support near-term growth, although the positive output gap should narrow through 2027."

"Core inflation is projected to remain slightly above 2% through 1H 2027 before easing thereafter."

"Nonetheless, given an appreciating S$NEER slope, SGD will likely stay relatively resilient."