MAS Eases Monetary Policy: A Strategic Move to Balance Growth and Inflation

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In a significant move, the Monetary Authority of Singapore (MAS) has eased its monetary policy for the first time since March 2020. This decision comes as MAS aims to strike a balance between fostering economic growth and maintaining price stability. The central bank has slightly reduced the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, while keeping the width and center level unchanged.

This adjustment aligns with market expectations and follows a period of lower-than-expected core inflation, which fell below the 2% threshold in December 2024. MAS has also revised its core inflation forecast for 2025 to 1-2%, down from the previous 1.5-2.5%.

The central bank anticipates that core inflation will remain below 2% this year, reflecting a return to low and stable underlying price pressures.

Economists believe this move signals MAS's growing comfort with the inflation trajectory and may lead to further policy adjustments if economic conditions warrant. The central bank will continue to monitor global and domestic economic developments closely, remaining vigilant to risks to inflation and growth

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