MAS likely to retain policy settings in October

A move to a zero percent appreciation stance could be triggered if growth deteriorates.

The Monetary Authority of Singapore (MAS) will maintain its current policy settings at the October meeting, according to Morgan Stanley.

However, the firm outlined several possible shifts depending on how economic conditions evolve.

A move to a zero percent appreciation stance could be triggered if growth deteriorates and disinflation pressures intensify, weighing on medium-term inflation. 

A lower re-centring of the policy band may be considered in the event of a global recession that significantly impacts domestic growth. 

Tightening, through a steeper slope of the policy band, remains unlikely in the near term and would only become a possibility in 2026 if growth outpaces expectations and the output gap closes quickly.

MAS held its policy steady in July, after easing in both January and April. This was largely due to stronger-than-expected growth and a lack of further disinflation. 

Despite a reduced risk of sharp slowdown, Morgan Stanley cautioned that the outlook remains uncertain and skewed toward further easing if growth or inflation underperforms.