Monetary authorities in Singapore Singapore.
Wei Leng Tay | Bloomberg | Getty Image
Singapore has relaxed its monetary policy for the first time since 2020, due to the decline in inflation rates expected and warning that growth has slowed down.
Singapore’s Monetary Administration said that it will slightly reduce the slope of its exchange rate policy band, namely the name effective exchange rate or S $ Neer of Singapore’s US dollar.
In issuance Mas said that Singapore’s growth momentum is expected to slow this year, and core inflation “faster than expected.”
It added that the inflation rate will remain below 2 % this year, “it reflects the return of low basic price pressure in the economy.”
It is estimated that the inflation rate of 2025 is 1.5 % -2.5 %, and 2.4 % in 2024.
MAS also reduced the prediction of its core inflation rate (reduced accommodation and private transportation prices to an average of 1 % -2 % in 2025), lower than the expected 1.5 % –2.5 % Monetary policy was released in October 2024.
Singapore’s GDP growth is expected to increase by 1 % -3 % in 2025, slower than 4 % in 2024.
MAS wrote: “The impact of the transformation of global trade policy may weigh the domestic manufacturing and trade -related service departments.”
Unlike other central banks that adjust their domestic loan interest rates, MAS has changed its currency exchange rate settings.
The central bank has strengthened or weakened its currency to major trading partners, thereby effectively setting S $ NEER. The exact exchange rate is not set, but the S $ NEER can move within the scope of the settings, and its exact level is not disclosed.
