MAS outlook splits as Morgan Stanley calls April tightening

Morgan Stanley sees April tightening, CGS stays cautious.

Morgan Stanley now expects the Monetary Authority of Singapore (MAS) to tighten policy in April, whilst CGS International maintains that policy remains on hold in 2026 unless GDP growth is stronger than expected or inflationary pressures persist.

Morgan Stanley stated that MAS maintained all parameters of its S$NEER policy unchanged at the January meeting, but increased its 2026 inflation projections to 1% to 2% and noted that the output gap would remain positive in 2026.

If incoming data are consistent with MAS’s assessment and no downside risks emerge, Morgan Stanley said it expects policy tightening in April, with a steeper slope of S$NEER appreciation as the most likely option.

CGS International said MAS kept the current rate of appreciation of the S$NEER policy band unchanged, along with the band’s width and midpoint, and raised its 2026 core and headline inflation forecasts to 1.0% to 2.0%.

CGS International said it views MAS’s statement as “measured but mildly hawkish” but expects inflation to stay contained, with limited scope for further tightening unless growth is stronger than expected or inflation pressures rise significantly.

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