Monetary Authority of Singapore leaves monetary policy on hold at its 30 July 2025 meeting:
- MAS will maintain the prevailing rate of appreciation of the S$neer policy band
- There will be no change to its width and the level at which it is centred
More from the statement, in brief:
-
For 2025 as a whole, MAS core inflation and CPI-All Items inflation are forecast to average between 0.5% and 1.5%.
-
Underlying and near-term inflationary pressures are expected to remain contained, though the inflation outlook in the quarters ahead is subject to both upside and downside risks.
-
MAS remains in an appropriate position to respond to risks to medium-term price stability.
-
Singapore’s GDP growth is projected to moderate in the second half of 2025, following a strong pace in H1.
-
Growth momentum is expected to ease as front-loaded activity fades.
-
GDP growth in H2 is expected to fall slightly below potential, though for 2025 as a whole, the output gap is projected to average around zero percent.
-
While the global and domestic economies have been resilient so far, prospects for the Singapore economy remain subject to significant uncertainty, especially in 2026.
-
Renewed trade conflict, financial instability, or geopolitical shocks could further exacerbate the drag from the global slowdown.
—
The Monetary Authority of Singapore (MAS) on hold following two earlier rounds of policy easing this year.
Ahead of the latest policy review, a Reuters poll of 12 analysts showed a split view: half expected MAS to hold its current settings steady, while the other half anticipated a further easing.
—
I’ve posted this before as an explainer, if you need.
Note that the MAS’s key monetary policy tool is its exchange rate policy. It adjusts the exchange rate of its dollar (SGD) instead of changing domestic interest rates like most other economies.
It manages the SGD exchange rate against a basket of currencies of Singapore’s major trading partners.
- sets the path of the policy band of the Singapore dollar nominal effective exchange rate (S$NEER)
- this serves to strengthen or weaken the local currency against those of its main trading partners
S$NEER is a combined index made up of bilateral exchange rates between Singapore and its major trading partners
- is a trade-weighted exchange rate
MAS permits the S$NEER to move up and down within the policy band (exact levels are not disclosed). If it goes out of this band, the MAS steps in by buying or selling Singapore dollars.
The policy band has three parameters that the MAS can adjust:
- the slope, the level and the width
- adjusting the slope will influence the pace at which the Singapore dollar strengthens or weakens
- adjusting the level, or mid-point, of the policy band allows for an immediate strengthening or weakening of the S$NEER,
- widening the policy band allows for more volatility of the S$NEER
- these parameters are what are reviewed
Visit investingLive.com (formerly ForexLive.com) for additional, original views.
This article was written by Eamonn Sheridan at investinglive.com.