MAS Maintains Monetary Policy Amidst Global Economic Resilience
The Monetary Authority of Singapore (MAS) has decided to keep its exchange rate-based monetary policy unchanged on 30 July 2025 after easing twice earlier this year. The central bank noted that global economic growth has been more resilient than previously anticipated, supporting its decision to maintain the current rate of appreciation for the Singapore dollar nominal effective exchange rate (S$NEER) policy band.
Despite steady global manufacturing production and trade since April, MAS highlighted that growth momentum is expected to moderate as front-loading activities dissipate and demand slows due to policy uncertainty and delayed tariffs. However, the risk of a sharp downturn in global growth has receded, helped by a de-escalation in trade tensions and more favourable financial conditions.
MAS also pointed to stronger-than-expected growth in Singapore’s GDP for the second quarter, though it projects that GDP growth will moderate in the second half of the year. The central bank noted significant uncertainty for 2026, with global tariff changes, trade conflicts, or geopolitical shocks potentially weighing on Singapore’s economic outlook.
Core inflation remained stable at 0.6% in Q2, with rising administrative prices offset by falling costs in other sectors. MAS expects inflationary pressures to stay contained in the near term, aided by low global oil prices and improved labour productivity. Core inflation is projected to increase slightly in late 2025, with the full-year forecast for core inflation and headline inflation averaging between 0.5% and 1.5%.
MAS will continue to monitor global and economic developments closely, remaining vigilant to risks to inflation and growth, while balancing the potential for both upside and downside inflationary pressures.
