Singapore Ease Monetary Policy for the First Time Since 2020, Warns of Growth Slowdown

Singapore on Friday Loosen Its Monetary Policy for the First Time Since 2020, Citing a Faster Than Expected Decline in Inflation and Warning About a Growth Slowdown.

The Monetary Authority of Singapore said it would slightly reduce the slope of its exchange rate policy band, know as the singapore dollar dollar nominal defaceful shop

In its release, Mas Said Singapore’s Growth Momentum is Expected to Slow this year, and core inflation “has modulated more quickly than expected.”

It added that inflation will remain below 2% this year, “Reflecting the return to low and stable underlying price pressures in the economy.”

Headline Inflation is Forecast to Average 1.5% – 2.5% in 2025, Compared to 2.4% in 2024.

MAS also downgraded its forecasts for the core inflation rate — which strips out prices of accommodation and private transport — to an average of 1%–2% in 2025, lower than the 1.5%–2.5% projected in its October 2024 Monetary Policy Release.

Singapore’s GDP growth is projection to grow at 1% -3% over 2025, Slower Than the 4% Seen in 2024.

“The Impact of Shifts in Global Trade Policies Cold Weigh on the Domestic Manufacturing and Trade-Related Services Sector,” MAS Wrote.

Unlike Other Central Banks that Tweak their domestic lending rates, mas alters the exchange rate settings of the singapore dollar.

The Central Bank Strengthens or Weakens Its Currency Against a Basket of its main trading partners, thus effectively setting the s $ Neer. The exchange rate is not set, raather, the s $ neer can move within the set policy band, the precise levels of which are not disclosed.

The Singapore dollar Weakened Slightly after the decision against the greenback, deprecating marginally to 1.3556, where the city-state’s Straits Times Index Climbed marginally.