SINGAPORE: The Monetary Authority of Singapore ( MAS ) has moved to loosen its monetary policy for the first time in nearly five years, amid expectations for slower growth and easing inflation in the year ahead.
In its January monetary policy statement released on Friday ( Jan 24 ), the central bank said it will “reduce slightly ” the slope of the Singapore dollar nominal effective exchange rate ( S$ NEER ) policy band.
The length of the policy group and the stage at which it is centred remained intact.
“This measured adjustment is consistent with a modest and gradual appreciation path of the S$ NEER policy band that will ensure medium-term price stability, ” the statement said, adding that it expects Singapore’s growth momentum to slow this year.
“MAS will closely monitor international and local economic developments, and remain diligent to threats to inflation and growth. ”
The central bank also lowered its forecasts for primary prices this year, noting that the essential measure for consumer rates has “moderated more quickly than expected and will be below 2 per cent this year”.
Core inflation, which strips out personal transportation and hotel prices, is expected to total between 1 and 2 per share in 2025, over from an initial estimates of 1. 5 to 2. 5 per share.
MAS also expects title inflation to total at 1. 5 to 2. 5 per share this time.
“Overall, the prospect for Singapore’s expansion and thus prices remains subject to difficulties in the external environment, ” it said in its statement.
The update comes a moment after data showed core cpi touching a more than three-year poor in December 2024. At 1. 8 per cent, it was significantly lower than the 1. 9 per share in November.
Headline inflation was constant at 1. 6 per share on-year in December.