The Monetary Authority of Singapore ( MAS ) stated that it would “reduce slightly” the rate of appreciation of the Singapore dollar’s nominal effective exchange rate ( S$ NEER ).
That implies that the local currency will probably contract or contract more slowly, which is what usually aids in export growth.
According to HSBC Global Research, the easing decision suggests that supporting progress in this ambiguous international trade will be the top concern. There is no consensus on tariff directions.
Because it meets four days a year rather than half as it did before 2024, MAS adopted a determined method.
” Higher regularity of meetings gives the MAS the freedom to change its monetary settings more quickly, especially in a world where there is no clarity on tax directions,” according to HSBC.
Additionally, it stated that MAS adopted a “dovish” attitude, which suggests that the central banks is still available to policyeasing.
Similar to what Ms. Ling of OCBC said, economic policy easing might be possible if the financial situation worsens.
With regard to the output gap becoming bad and the potential disadvantage inflation risks,” the language is plainly dovish,” she said. MAS cut its forecast for core inflation from 0.5 % to 1.5 % for 2025.
SINGAPORE DOLLAR OUTLOOK
Analysts predict that the Singaporean dollar will continue to be somewhat solid despite MAS’s actions.  ,
After MAS released its economic policy statement, HSBC reported that the money rebounded after the US dollars score and the S$ NEER rose.
All in, the banks stated that it is challenging to have a negative SGD industry idea at this time.
According to Mr. Christopher Wong, an OCBC FX planner, the Singdollar will commerce between 1.31 and 1.31 in the franc.
The Singapore money is likely to fall against the US dollar in 2025 given the impact of Trump’s tariffs on progress, trade, and sentiments as well as possible MAS plan easing.
But, he said, the Singapore money may support the dollar if the Euro and Chinese yuan recovered or the US dollar continued to weaken.