Singapore Central Bank Maintains Monetary Policy

(RTTNews) - Singapore central bank maintained its monetary policy on Wednesday after easing twice this year, as there are risks to growth from renewed trade conflicts and geopolitical shocks.

The Monetary Authority of Singapore said it will maintain the prevailing rate of appreciation of the S$NEER policy band and there will be no change to its width and the level at which it is centered.

The bank had softened its policy twice earlier this year and it is in an appropriate position to respond to risks to medium-term price stability, the bank said.

Unlike most central banks, the MAS applies the exchange rate against a basket of currencies within an undisclosed band as its monetary policy tool.

The bank cautioned that GDP growth in the city-state economy will likely slow in the second half of the year with the level of output falling slightly below potential. Nonetheless, the output gap is estimated to average around zero percent.

The central bank observed that prospects for the Singapore economy remain subject to significant uncertainty, especially in 2026. Changes in the effective trade tariff rates globally could affect externally-oriented sectors of Singapore.

Renewed trade conflict, financial or geopolitical shocks would exacerbate the drags posed by the global slowdown, and in turn weigh on domestic GDP growth, MAS noted.

The MAS said it will closely monitor global and economic developments, and remain vigilant to risks to inflation and growth.

The bank retained its outlook for both overall and core inflation for 2025. MAS core inflation and overall inflation are forecast to average 0.5-1.5 percent.