Singapore Central Bank Maintains Policy As Expected

(RTTNews) - Singapore's central bank left its monetary policy unchanged at the first policy meeting of the year as inflation is estimated to fall and the economic growth is expected to pick up this year.

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

The MAS applies the exchange rate against a basket of currencies within an undisclosed band as its monetary policy tool.

The central bank shifted to a quarterly meeting schedule from this year. Earlier the bank conducted the policy meetings twice a year.

The shift to holding four meetings per year gives them more flexibility to adjust monetary policy settings as needed, ING economist Nicholas Mapa said.

The development suggests that a potential adjustment in policy is likely before the fourth quarter of the year, the economist added.

The MAS forecast core inflation to remain elevated in the earlier part of this year but to ease gradually and step down in the fourth quarter before easing further in 2025.

Capital Economics' economist Shivaan Tandon said the MAS is likely to loosen its policy stance in April citing the weaker growth and easing concerns about inflation.

Overall inflation in 2024 is expected to be lower at 2.5-3.5 percent, down from the previous range of 3-4 percent.

Excluding the effects of the increase in the GST rate, headline inflation is forecast at 1.5-2.5 percent.

In 2023, the city-state economy is estimated to have expanded 1.2 percent. GDP growth is expected to strengthen this year with growth seen between 1.0 percent and 3.0 percent.