SINGAPORE: On Monday (April 14), Singapore’s central bank said it would “slightly” reduce the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band following its January policy move. However, it will continue with a “modest and gradual appreciation”, according to its released monetary policy statement. Meanwhile, there will be no change to the width of the band and the level at which it is centred.
The Monetary Authority of Singapore (MAS) added that it “will closely monitor global and domestic economic developments and remain vigilant to risks to inflation and growth”.
This followed expectations from 14 economists surveyed by Bloomberg, who expected the central bank would reduce the slope of the S$NEER policy band today. According to Channel News Asia (CNA), nine out of 10 analysts polled by Reuters had expected the same.
The MAS cited signs of weakening economic activity among Singapore’s key trading partners in the first quarter of 2025. It noted that consumer and business confidence had dropped due to rising trade policy uncertainty, while retail sales and investment plans had also softened. In the region, exports became more uneven as earlier boosts from trade frontloading faded, although demand for electronics driven by artificial intelligence (AI) remained somewhat resilient.
MAS said that prospects for global trade and gross domestic product (GDP) growth dimmed in early April after the US imposed tariffs and some countries announced retaliatory measures. Global financial conditions have also tightened as asset markets have begun repricing risks in the global economy.
The government now expects Singapore’s GDP growth to slow to between 0% and 2% in 2025, from 4.4% last year. MAS core inflation is forecast to average between 0.5% and 1.5% in 2025, from the earlier projection of 1.0% to 2.0% made in January. Headline inflation, or CPI-All Items inflation, is expected to average 0.5% to 1.5% in 2025, from the previous 1.5% to 2.5%. /TISG
Featured image by Depositphotos (for illustration purposes only)