MAS Eases Singdollar Policy to Help Economy Weather Trump's Tariff Storm

It now expects core inflation to average 0.5%-1.5% in 2025, down from 1%-2%

- Ovais Subhani

Singapore's central bank reduced the pace of the local currency's trade-weighted appreciation in its second such move in 2025, in response to easing inflation and rising risks to economic growth from US President Donald Trump's tariff barrage.

Inflation has eased, with the Monetary Authority of Singapore (MAS) now expecting core inflation—which excludes private transport and accommodation costs to better represent household expenses—to average 0.5 per cent to 1.5 per cent in 2025, down from the 1 per cent to 2 per cent predicted in January.

"MAS will continue with the policy of a modest and gradual appreciation of the S$Neer (Singapore dollar nominal effective exchange rate) policy band. However, the rate of appreciation will be reduced slightly," it announced on April 14.

The MAS move was widely anticipated. Analysts believe an easier currency setting may help cap a recent surge in the Singapore dollar's strength and mitigate some of the price impact on exports from the new tariff.

Analysts, including UOB economist Jester Koh, estimate that the latest easing has slowed down the pace of S$Neer appreciation to 0.5 per cent a year.

The easing in January had already cut the appreciation rate to 1 per cent from 1.5 per cent.

The Singapore dollar edged up 0.2 per cent to 1.3165 per US dollar as at 1 pm, after the MAS announcement, following the US currency's biggest plunge since 2022 last week.

The Singdollar had jumped 1 per cent against the US dollar on April 11, bringing its year-to-date gains to 3.1 per cent against the greenback.