Singdollar gains may slow as it nears MAS policy ceiling

However, SEB expects any pullback in the Singapore dollar to be short-lived, as MAS could resume monetary tightening in 2027 if inflation risks persist.

“The Singdollar should continue to outpace its regional peers,” the bank said. “Year-to-date, it lags only the Korean won and the Chinese yuan.”

Meanwhile, it noted that imported inflation remained elevated and could continue to put upward pressure on consumer prices over the next six months.

It also flagged potential food price increases linked to El Niño and continued uncertainty surrounding energy production and shipments from the Middle East.

“MAS will likely resume tightening in 2027 should upside risks to inflation materialise,” SEB said.

MAS expects core inflation to average 1.5% to 2.5% in 2027, compared with its latest forecast of 1.5% to 2% for this year.

“Inflation is expected to moderate over 2027 as import costs ebb and domestic price pressures stay subdued,” the authority said on 14 October.

Meanwhile, GDP growth moderated to 5.4% year-on-year in the third quarter from an upwardly revised 6.2% in the previous quarter.