Singapore’s central bank, the Monetary Authority of Singapore (MAS), eased its monetary policy on Friday for the first time since 2020, citing slower-than-expected inflation and growth. MAS reduced the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band but retained its width and central level. This adjustment aligns with a modest appreciation path to maintain medium-term price stability.
Monetary policy
Core inflation forecasts for 2025 were lowered to 1.0%-2.0%, down from 1.5%-2.5%, while GDP growth is projected to slow to 1%-3% in 2025, compared to 4% in 2024. Inflation cooled to 1.8% in December 2024 from its 2023 peak of 5.5%.
The Singapore dollar steadied after an initial dip, and the domestic stock index rose 0.7%. Analysts remain divided on future policy adjustments.
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