The Monetary Authority of Singapore (MAS) announced in its July 2025 Monetary Policy Statement (MPS) that it will maintain the current rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band at an estimated 0.5% per annum. This decision aligns with the consensus among analysts, including those from UOB Global Economics and Markets Research, who anticipated no change in policy.
The MAS highlighted the resilience of both the global and domestic economies, despite ongoing uncertainties related to tariffs. The statement noted that whilst global growth momentum may moderate, Singapore’s domestic growth has exceeded expectations in the first half of 2025, driven by robust construction activity and trade-related services. This performance has led UOB to revise its 2025 growth forecast for Singapore to 2.1%, surpassing the Ministry of Trade and Industry’s official forecast range of 0.0-2.0%.
MAS Managing Director Chia Der Jiun remarked that Singapore’s GDP growth has held up better than anticipated in the first half of the year but is expected to slow in the latter half. The central bank also maintained its full-year core and headline inflation forecasts at 0.5-1.5%, adopting a cautious outlook on inflation risks.
Looking ahead, MAS indicated that it may consider easing policy in the October 2025 MPS or January 2026 MPS if the expected payback effects from front-loading and tariffs lead to a slowdown in growth momentum. The central bank emphasised that it remains prepared to respond to risks to medium-term price stability, with room to adjust the S$NEER within the existing band if necessary.
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