The Monetary Authority of Singapore may tighten policy by 50 basis points in April.

The market expects the Monetary Authority of Singapore to tighten monetary policy in April, by raising the slope of the Singapore dollar's nominal effective exchange rate policy band by 50 basis points to 1.0%, and may take similar tightening measures again in July. Inflation pressures brought by rising energy prices, combined with strong economic growth momentum, provide a rationale for the policy tightening. Singapore's GDP is forecasted to grow by 5% in 2025, with the growth momentum continuing into 2026. Core inflation in February increased by 1.4% year-on-year, higher than the median expectation; overall inflation rate was 1.2%. The central bank has raised its inflation forecast range for 2026 from the previous 0.5%-1.5% to 1.0%-2.0%, citing rising labor and energy costs. Analysts estimate that if oil prices surpass $100 per barrel, it could increase core inflation by 0.5 percentage points; despite the resilience shown in purchasing managers' indices and electricity demand, persistently high oil prices will pose pressure on the economic outlook.