Singapore Monetary Policy Eased After Weaker-Than-Expected GDP Data – Currency Thoughts

Singapore Monetary Policy Eased After Weaker-Than-Expected GDP Data

April 14, 2025

The Monetary Authority of Singapore flattened the slope of the SGD’s target rate following news that GDP in that economy had contracted by 0.8% between 4Q 2024 and last quarter. That bigger-than-expected decline was the first negative GDP movement since a 0.5% drop in 1Q 2022 and lowered year-on-year economic growth to 3.8% from 5.0% in the previous quarter and 5.7% in the third quarter of last year.

Monetary policy in Singapore is subordinated to an exchange rate target, defined by a permissible corridor of movement. In January, officials had reduced the allowed rate of SGD appreciation while leaving the width and center of the target band unchanged. They again left the currency corridor’s width and center the same while making policy a bit more accommodative.  Explaining this second policy easing, officials wrote, “amid the weakening external outlook, Singapore’s output gap will turn negative. Consequently, imported and domestic cost pressures will remain low and MAS Core Inflation is forecast to stay well below 2%. The risks to inflation are tilted towards the downside.”

Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: Monetary Authority of Singapore

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