Singapore c. bank expected to maintain monetary policy next week

Singapore’s central bank, the Monetary Authority of Singapore (MAS) is likely to maintain its current monetary policy next week, refraining from making any adjustments during its upcoming review, according to 9 out of 10 analysts surveyed by Reuters.

Factors such as rising oil prices due to geopolitical tensions and persistent food price inflation caused by extreme weather conditions are contributing to uncertainties in both inflation and growth, Moody’s Analytics economist Denise Cheok said.

Cheok predicts that the MAS may reduce the slope of the Singapore dollar nominal effective exchange rate (S$NEER) band in the first half of 2025, with a possible further reduction in the midpoint of the band during the second half of the year if imported inflation continues to decline.

However, she expects the MAS to maintain its current policy stance for the remainder of 2024.

Inflation in Singapore remains persistent, although it has cooled from its peak of 5.5 per cent in early 2023. The central bank forecasts core inflation to further ease to between 2.5 per cent and 3.5 per cent by the end of the year.

The trade ministry recently revised its GDP growth forecast for 2024 to a range of 2.0 per cent to 3.0 per cent, up from the previous estimate of 1.0 per cent to 3.0 per cent.

Attribution: Reuters

Subediting: Y.Yasser