Singapore interest rates vs the Fed: what the gap means without a policy rate

The Federal Reserve raised its target range by 25 basis points to 3.75-4.00% on 16 September 2026, the first increase since July 2023 (Federal Reserve). Across Asia, the usual next question is how far each central bank’s policy rate now sits from the Fed. Singapore is the one market where that question has no direct answer.

Is there a Singapore policy rate gap with the Fed?

No. Singapore has no policy interest rate, so there is no official gap to measure against the Fed’s 4.00% upper bound. MAS “implements monetary policy by undertaking foreign exchange operations” to keep the Singapore dollar nominal effective exchange rate (S$NEER) within a policy band (MAS). It adjusts the band’s slope, width or centre instead of an interest rate.

The closest market reference is SORA, the average rate on overnight unsecured interbank lending in Singapore dollars. At the end of September 2026 overnight SORA was 1.4015% and three-month compounded SORA was 1.2336% (MAS via SingStat).

Overnight SORA (1.4015%, end of September 2026) minus the Fed's upper bound of 4.00%. A reference figure calculated by CapsWindow, not a policy rate gap

SORA is set in the money market every day. MAS does not target it, so a change in SORA is not a MAS decision in the way a rate move is for the Fed.

How has the SORA gap with the Fed moved since 2019?

The table uses month-end overnight SORA and the Fed’s upper bound on the same date (FRED DFEDTARU). The gap column is CapsWindow’s calculation.

Visual guide

How has the SORA gap with the Fed moved since 2019?

Reference gap

• End-2019−39.38 bp
• End-2022−197.07 bp
• July 2023 (Fed peak)−194.96 bp
• End-2024−238.77 bp
• End-2025−285.51 bp
• End-September 2026−259.85 bp

-285.510

Point in time	Overnight SORA	Fed upper bound	Reference gap
End-2019	1.3562%	1.75%	−39.38 bp
End-2022	2.5293%	4.50%	−197.07 bp
July 2023 (Fed peak)	3.5504%	5.50%	−194.96 bp
End-2023	3.6235%	5.50%	−187.65 bp
End-2024	2.1123%	4.50%	−238.77 bp
End-2025	0.8949%	3.75%	−285.51 bp
End-September 2026	1.4015%	4.00%	−259.85 bp

The July 2023 row uses the month-end SORA value, not the value on 26 July, the day of the Fed’s last hike before 2026. SORA stayed below the Fed’s upper bound at every point in the table. Between the end of 2019 and the end of 2023, SORA rose by about 227 basis points while the Fed’s upper bound rose by 375 (calculated). In 2026 so far it has gone the other way: SORA rose about 51 basis points from the end of 2025 against 25 for the Fed, narrowing the reference gap by about 26 basis points.

What did MAS decide in 2026?

MAS tightened twice and held twice. The width of the band and the level at which it is centred did not change in any of the four statements.

Date	Decision	MAS wording
29 January	Unchanged	“maintain the prevailing rate of appreciation” (statement)
14 April	Tightened	“increase slightly the rate of appreciation” (MAS on X)
27 July	Tightened	“increase the rate of appreciation of the policy band very slightly” (statement)
14 October	Unchanged	“maintain the rate of appreciation of the policy band” (statement)

In October MAS put its 2026 forecasts at 1.5-2.0% for core inflation and around 2.0% for headline inflation. MAS does not publish the numerical slope of the band, so the size of each tightening cannot be converted into basis points.

Both MAS and the Fed tightened in 2026, but through different tools. The Fed held at its January, March, April, June and July meetings before raising in September. MAS acted in April and July by letting the Singapore dollar appreciate a little faster.

What is left after inflation?

A real policy rate cannot be calculated for Singapore because there is no policy rate. The table puts SORA in its place as a reference. Both columns are CapsWindow calculations, and the inflation months differ.

Measure	United States	Singapore (reference)
Rate	4.00% (Fed upper bound)	1.4015% (overnight SORA, end-September)
Headline inflation, year on year	3.7% (September 2026, BLS)	2.3% (August 2026, SingStat)
Rate minus inflation	+0.30 points	−0.90 points

The negative Singapore figure should not be read as a sign of loose policy. MAS tightens by letting the Singapore dollar strengthen, which acts on prices mainly through import costs rather than through the interest rate.

Which decisions come in late October, and what are markets watching?

MAS has no decision in late October. The Fed meets on 27-28 October and again on 8-9 December (Federal Reserve calendar). Most neighbouring central banks also decide in the next few weeks.

Market	Policy rate	Gap vs Fed 4.00%	Next decision (local date)
Indonesia (BI-Rate)	5.75%	+175 bp	21 October (meeting 20-21 October)
Philippines (BSP)	5.00%	+100 bp	22 October
Vietnam (refinancing rate)	4.50%	+50 bp	no fixed schedule
Hong Kong (Base Rate, formula-linked)	4.25%	+25 bp	follows the Fed, 29 October
Malaysia (OPR)	2.75%	−125 bp	5 November
Taiwan (discount rate)	2.00%	−200 bp	17 December
Japan (call rate target)	about 1.25%	−275 bp	29-30 October
Thailand (BOT)	1.00%	−300 bp	28 October
Singapore	no policy rate	SORA reference −259.85 bp	next statement expected January 2027

Rates are as of 17 October 2026. Vietnam’s rate is unchanged according to news reports and a UOB note; the State Bank’s own page could not be checked.

For the Fed, futures pricing moved sharply within days. Reports citing CME FedWatch put the probability of an October hike at 41.5% at 12:20 pm US Eastern time on 14 October (Yahoo Finance), and at about 15% to 17% on 16 October, depending on source and time of day (Cointelegraph). On 16 October Fed Chair Kevin Warsh said, “I don’t prejudge meetings.”

Among neighbours, MUFG wrote on 16 October that the consensus expects Bank Indonesia to hold at 5.75%, while MUFG itself forecasts a 25 basis point hike to 6.00%, and a BSP hike to 5.25%. These are forecasts, not results.

If the Fed did raise by 25 basis points and a neighbour left its own rate unchanged, that neighbour’s gap would move 25 basis points lower by arithmetic. Hong Kong is the exception, because its Base Rate is reset by formula. For Singapore there would be no policy gap to recalculate, only the market reference.

To see how a different interest rate assumption changes the amount you would need in future, try the future need calculator.

Open the future need calculator →

Does a wider gap weaken the Singapore dollar?

Not reliably, and in recent years not at all in the textbook direction. At the end of August 2026 the ten-year SGS yield was 240 basis points below the US ten-year yield, while the Singapore dollar averaged 1.2763 per US dollar that month, close to its strongest level in years. Since 2016 a wider negative ten-year gap has gone with a stronger Singapore dollar, with a correlation of +0.72 (details in our yield gap note).

The likely reason is the policy framework itself. Because MAS lets the currency appreciate along its band, investors may accept lower Singapore dollar interest rates in exchange for expected currency gains. That is an interpretation, not something the correlation proves.