Singapore’s central bank has held its exchange-rate based monetary policy unchanged, citing strong Q2 growth and improving trade conditions. The decision resets expectations as analysts watch for softer inflation and rate path clarity.
Policy Review Outcome
At its July 2025 policy review, the Monetary Authority of Singapore kept all parameters of its exchange-rate policy band — slope, width, and centre — unchanged. The decision followed surprise Q2 GDP growth and reduced trade friction.
Growth and Inflation Dynamics
Second-quarter expansion exceeded estimates, helping the economy avoid a technical recession. At the same time, core inflation eased to approximately 0.6% year-on-year, offering MAS room to pause policy without adding pressure.
Market and Analyst Sentiment
Opinions were split: half of the economists polled expected unchanged settings, while others forecast a modest easing at upcoming meetings. Consensus is that MAS is conserving policy flexibility amid macro uncertainties.
Implications for Financial Institutions
Banks and corporates should plan for a stable monetary environment in the near term. However, the SGD policy band mechanism means export margins and FX-sensitive operations must remain alert to S$NEER adjustments.
Editor’s Note
MAS’s move balances caution with responsiveness. Stability now, flexibility later — a prudent playbook in a volatile trade and policy backdrop.
Tags
Singapore monetary policy, MAS hold, S$NEER, inflation moderation, central bank decision
About the Author
Marks Toms – Editor-in-Chief
Marks oversees editorial policy, compliance, and fact-checking at bankaccountsopen.
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