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Singapore Central Bank Faces Divided Outlook Ahead of Key Policy Review
25 Jul
Summary
- Economists split on whether MAS will loosen monetary policy or leave settings unchanged
- Singapore's economy grew 1.4% in Q2 2025, avoiding technical recession
- MAS eased policy twice in 2025 due to growth concerns, now evaluating earlier measures
Ahead of the Monetary Authority of Singapore's (MAS) scheduled policy review on July 30, 2025, economists are divided on whether the central bank will loosen its currency-based monetary policy or leave settings unchanged.
According to a Reuters poll, half of the 12 analysts expect the MAS to loosen its policy to counter an expected negative output gap in the economy, while the other half anticipate no change. The MAS had eased policy twice this year in January and April 2025 due to growth concerns stemming from U.S. tariffs, after holding settings steady since a tightening in October 2022.
However, Singapore's economy has posted better-than-expected results, growing 1.4% quarter-on-quarter in the second quarter of 2025, according to preliminary government data. This avoided a technical recession for the country. Analysts suggest the MAS may now pause to evaluate the effects of its earlier easing measures and await greater clarity on trade-related uncertainties.
While some expect the MAS to maintain its current policy, others believe the central bank may flatten the Singapore dollar's nominal effective exchange rate (S$NEER) slope to address the potential payback from frontloading activity and the impact of uncertainty on investment.
