Monetary Authority of Singapore (MAS) keeps policy unchanged:
- Maintains the current rate of appreciation for the S$NEER policy band.
- No changes to the width and center level of the band.
Additional Insights:
- Core inflation is expected to average 2.5%-3.0% in 2024, ending around 2% by year-end.
- Q4 core inflation momentum is expected to stay contained.
- Singapore’s economy should continue steady growth close to its potential in 2025.
- 2025 economic growth forecasted at the upper end of the 2-3% range.
- Core inflation projected to average around 1.5-2.5% in 2025.
- CPI inflation also forecasted at 1.5-2.5% in 2025.
- Inflation risks are now more balanced than three months ago.
MAS primarily uses exchange rate policy rather than interest rate adjustments. It manages the Singapore dollar (SGD) against a basket of currencies of its major trading partners.
- MAS sets the S$NEER policy band.
- This regulates the SGD value compared to major trading partners’ currencies.
The S$NEER reflects bilateral exchange rates and is trade-weighted. MAS allows for fluctuations within the policy band and intervenes if it exceeds these limits.
The MAS can adjust:
- The slope, affecting the SGD’s strengthening or weakening pace.
- The level for immediate adjustments.
- The width to allow more volatility.
`