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USD/SGD Forecast: Crédit Agricole Expects Further MAS Tightening Singapore Dollar support could strengthen as firm growth and rising inflation prompt another modest MAS policy tightening, says Crédit Agricole. Crédit Agricole expects Singapore to tighten monetary policy again on Wednesday, with technology-led growth and rising inflation supporting the case for a stronger currency despite the US Dollar's recent advance.

The Monetary Authority of Singapore's announcement is scheduled for 14 October.

Crédit Agricole's immediate currency outlook is more restrained, however, with 1.27 described as a strong near-term floor for USD/SGD while US interest-rate expectations continue to support the Dollar.

The latest official inflation release put August core inflation at 2.2%, up from 2% in July, with faster increases in services, retail goods and food prices.

Crédit Agricole strategist Eddie Cheung writes: "Singapore macro fundamentals continue to strengthen amid a global tech upcycle and foreign portfolio inflows, while the negatives from trade tensions have been less than expected."

Demand running above the economy's sustainable capacity would make it harder to absorb imported costs without broader price pressures.

Cheung writes: "At its July meeting, the MAS highlighted a projected widening of the positive output gap for 2026 as a whole-a situation we do not think has changed."

Inflation strengthens the case for another adjustment Crédit Agricole also highlights elevated oil prices as a continuing threat to imported costs.

MAS manages the Singapore Dollar against a basket of trading partners' currencies, using a faster appreciation path to restrain import prices and their spread into domestic inflation.

This is exchange-rate tightening, rather than a benchmark interest-rate rise.

Following April's tightening, MAS announced in its July policy decision: "MAS will therefore increase the rate of appreciation of the policy band very slightly."

It left the band's width and centre unchanged.

Cheung expects a similarly measured move: "Therefore, despite consecutive tightening, we think there is still scope for the MAS to tighten "very slightly" in October-the smaller increment introduced at its July meeting. Even if the MAS were to hold, we would expect a hawkish tilt."

US Dollar strength could delay Singapore Dollar gains Cheung writes: "The SGD has been a relative outperformer in Asia and is among the three regional currencies to have appreciated against the USD year-to-date, underpinned by Singapore's strong macro backdrop, foreign portfolio inflows and MAS tightening."

That assessment follows earlier ERUK coverage of the role of capital inflows and monetary policy in Singapore Dollar resilience.

Cheung estimates that the currency is already well into the upper half of the policy band: "MAS tightening should continue to keep the currency supported, with the SGD NEER currently positioned c.1.5% above the midpoint of the +/-2% policy band."

Those band parameters are the bank's estimates, rather than published MAS boundaries.

A firmer MAS stance can support Singapore's trade-weighted currency without ensuring that it rises against a strengthening US Dollar.

Cheung writes: "The greater risk for USD/SGD lies on the USD side, with the DXY rising to its highest level since Q225. We think the DXY could remain buoyed into end-2026 on the Fed rate hike dynamic before easing more substantially in 2027, leaving USD/SGD more rangebound around current levels."

Crédit Agricole's longer-term projection of USD/SGD at 1.25 by December 2027 allows for further Singapore Dollar gains as that US support fades.

The nearer 1.27 level is the bank's market assessment, not an official MAS boundary.

Cheung writes: "For now, 1.27 remains a strong floor, though we think this level could be tested as the USD weakens anew into 2027."

USD/SGD exchange rate FAQ When is the next MAS policy announcement?

The statement is scheduled for 14 October.

Does MAS tightening mean an interest-rate rise?

The expected adjustment is to the Singapore Dollar's appreciation path against a currency basket.

Is 1.27 an official USD/SGD limit?

No. It is Crédit Agricole's near-term market assessment. Its longer-term forecast is 1.25 by December 2027.