Singapore’s central bank kept its monetary policy unchanged due to positive economic data from the third quarter. Analysts expect a policy shift next year to address external risks.
The Monetary Authority of Singapore will maintain its exchange rate policy band, known as the S$NEER.
MAS noted that inflation risks have balanced out and that economic growth is improving.
Recent data showed Singapore’s GDP grew by 4.1% year-on-year in Q3, boosted by manufacturing, up from 2.9% in Q2. Economists expect a brighter outlook for 2025, but caution about geopolitical and trade conflicts.
MAS anticipates GDP growth in 2024 will be around 2.0% to 3.0%, but warns of significant uncertainties due to external risks.
Core inflation is expected to fall to about 2% by the end of 2024, down from 5.5% earlier this year.
Singapore’s unique monetary policy focuses on the exchange rate instead of domestic interest rates, reflecting its heavy reliance on trade.
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