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HSBC’s Abhilash Narayan notes that the Monetary Authority of Singapore (MAS) unexpectedly tightened policy on 27 July 2026 by raising the Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) slope to 1.25%. Supported by strong Gross Domestic Product (GDP) prospects, Narayan now forecasts 4.6% growth for 2026. He expects another MAS tightening in October and maintains an overweight stance on Singapore equities for their quality and defensive characteristics.
MAS move underpins SGD and local stocks
“The Monetary Authority of Singapore (MAS) surprised the markets by delivering an unexpected tightening of monetary policy at its meeting on 27 July 2026. This comes on the back of a policy tightening in April. The MAS raised the slope of the SGD NEER (Singapore dollar nominal effective exchange rate) band “very slightly” by 0.25% to 1.25%.”
“Singapore’s robust growth trajectory also gives the central bank greater confidence to focus on tackling inflation. The tailwind from the artificial intelligence boom, along with the resilience of the construction and services sectors, leads us to upgrade our 2026 GDP growth forecast to 4.6% (from 3.3% previously).”
“We expect the MAS to tighten the monetary policy again in October, bringing the SGD NEER slope to 1.50%. Solid fundamentals and an attractive dividend yield support our overweight stance on Singapore equities, which continue to offer high-quality and defensive exposure.”
