Singapore Dollar: Policy pause with strong growth – Commerzbank

Charlie Lay notes Singapore’s Q3 Gross Domestic Product (GDP) beat expectations at 5.4% year-on-year, with broad-based strength and growth likely near the upper end of the government’s 4.5–5.5% forecast. Despite robust activity and near-term inflation risks, Monetary Authority of Singapore (MAS) surprised by holding policy, keeping the Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) appreciation path unchanged and signalling this is a pause rather than a move toward easing.

MAS hold keeps SGD supported

"Singapore's advance Q3 GDP growth was stronger than expected at 5.4% yoy (Bloomberg consensus: 5.1%), moderating from an upwardly revised 6.2% in Q2, from 5.9% initially."

"Growth is likely to come in near the upper end of this range, with a further upward revision possible in November."

"Growth is expected to remain robust in the next few quarters, supported by AI-related demand and capacity expansion, before moderating in H2 2027."

"On monetary policy, the Monetary Authority of Singapore (MAS) surprised by leaving policy unchanged, against expectations of another modest tightening."

"USD/SGD was little changed following the GDP and MAS announcements, holding at around 1.2800."