The small central banks are building new plumbing while the big ones hold

Singapore builds a gold hub

The most concrete announcement of the week came from Singapore. The Monetary Authority of Singapore has launched a central bank gold vaulting service, located in the national currency vault, which has a storage capacity of 500 tonnes of gold. MAS will offer gold custody accounts to select Singapore-based bullion banks, and it is introducing an enhanced GST framework for wholesale investment precious metal gold market activities with the Ministry of Finance. The framework extends tax waivers to wholesale services including vaulting, refining and recasting, assaying, and broking, and is expected to take effect from April 2027. m:…4033

The vault is only the first piece. SGX Group and six clearing banks are working to complete preparations for an OTC gold clearing system by end-2026, with live trading and market operations expected to commence in the first quarter of 2027, and SGX's physically deliverable Gold Kilobar Futures targeted for launch in the second quarter of 2027. The sequence is deliberate: custody first, then clearing, then a futures contract, each step making Singapore a more complete place to hold and trade gold. A central bank does not build a 500-tonne vault as a gesture. It builds one because it expects the metal to come. m:…4033

Iceland plugs into Europe's repo

Iceland made a quieter but similar move. The Central Bank of Iceland has completed the onboarding process for the Eurosystem Repo Facility for Central Banks, known as EUREP, which provides it with an additional source of temporary euro liquidity. Access to EUREP strengthens the resilience and the flexibility of the central bank's foreign exchange reserve management, the bank says. For a small central bank outside the euro area, a repo line with the Eurosystem is insurance: it means euros are available on short notice without selling reserves into a stressed market. m:…6910

Norway, meanwhile, chose to wait. The Policy and Financial Stability Committee has decided to keep the policy rate unchanged at 4.5 percent, Norges Bank says, and it will likely be necessary to keep the policy rate elevated for a time. The bank is prepared to raise the policy rate if needed to bring inflation down to target within a reasonable time horizon. Consumer price inflation in Norway was 3.4 percent, against a task of keeping inflation close to 2 percent over time, and inflation adjusted for tax changes and excluding energy products was 3.0 percent. High labour cost growth in recent years will likely contribute to keeping inflation elevated ahead, the bank says, and the krone exchange rate has appreciated. The message is that Norway's inflation problem is not solved, but it is not worsening fast enough to force a move. m:…6959

Japan walks toward neutral

Japan's central bankers are talking about the end of the easy-money era in the careful language of a summary of opinions. Japan has experienced a regime shift where the economy is now exposed to usual economic cycles, the Bank of Japan's summary of its October meeting says, and underlying CPI inflation is generally consistent with the 2 percent price stability target. The Bank maintained the current policy interest rate at the October meeting, but the summary says the Bank needs to bring the policy interest rate to the neutral level soon, and the neutral interest rate in Japan is likely considerably above 1 percent. That is a long way from the zero rates that defined Japan for a generation, and the direction is unmistakable even if the pace is not. m:…1208

The Bank is also changing how it unwinds its past interventions. The Bank of Japan will change the pace of its ETF sales, the summary says, and the Ministry of Finance expects the Bank to make decisions on ETF disposal as appropriate. Japan's economy has recovered moderately, though some weakness exists due to the Middle East situation, and economic growth is expected to continue moderately in fiscal 2026, supported by government measures and global AI demand. Private consumption lacks the momentum to lead the overall economy despite being resilient. Put the pieces together and the picture is of a central bank that is no longer stimulating, not yet tightening aggressively, and managing the exit from a decade of extraordinary policy one careful step at a time. m:…1208