Strong economy, uncertain outlook split views on S'pore's monetary policy

Many analysts believe MAS will leave it unchanged; some say it will ease its stance

- Ovais Subhani

Better-than-expected economic growth and declining inflation so far in 2025 are enough to lead Singapore's central bank to leave its currency-driven monetary policy unchanged.

This is what many analysts believe will happen on July 30 when the Monetary Authority of Singapore (MAS) releases its quarterly policy statement.

However, this is not a consensus view. Quite a few analysts believe that the uncertainty over growth and inflation outlook might prompt MAS to further ease its policy stance.

The MAS has already eased its policy stance twice in 2025 to slow the rate of appreciation of the S$Neer, or Singapore dollar nominal effective exchange rate.

The MAS policy statements usually have implications for the value of the Singapore dollar against other currencies—which is important for Singaporeans planning to travel abroad or making hefty payments such as tuition fees for their children studying abroad.

Unlike other central banks, the MAS manages monetary policy by letting the local dollar rise or fall against a basket of currencies of Singapore's main trading partners within an undisclosed trading band, which is the S$Neer.

MAS' primary tool for managing the S$Neer is intervention operations in the spot foreign exchange market, which involves the sale or purchase of US dollars against the Singapore dollar to ensure that the S$Neer is kept within the policy band, and consistent with domestic price stability.

But the exchange rate at the moment is of least concern.