Singapore Eases Monetary Policy After Nearly Five Years

SINGAPORE, Jan 24 (Bernama) -- The Monetary Authority of Singapore (MAS) eased its monetary policy on Friday, the first such move since March 2020.

MAS said it will reduce slightly the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band with no change to the width of the policy band or the level at which it is centred.

“This measured adjustment is consistent with a modest and gradual appreciation path of the S$NEER policy band that will ensure medium-term price stability,” MAS said in its monetary policy statement.

The central bank and financial regulator said it will closely monitor global and domestic economic developments, and remain vigilant about risks to inflation and growth.  

MAS said Singapore’s growth momentum is expected to slow over this year, after outperforming in the second half of last year (H2 2024), with the level of output projected to come in close to the economy’s potential for 2025 as a whole. 

Meanwhile, MAS said core inflation, excluding accommodation and private transport, has moderated more quickly than expected and will remain below two per cent this year, reflecting the return to low and stable underlying price pressures in the economy.

It forecasts core inflation to average one to two per cent in 2025, lower than the 1.5 to 2.5 per cent projected in the October 2024. 

Meanwhile, CPI-All Items inflation is forecast to average 1.5 to 2.5 per cent this year, compared to 2.4 per cent in 2024.

-- BERNAMA