MAS maintains Singdollar policy, sees core inflation easing to 2% by Dec

Singapore's central bank kept unchanged its monetary policy stance that favours a stronger Singapore dollar to curb inflation, which it said would continue to ease through the rest of 2024.

- Ovais Subhani

The Monetary Authority of Singapore (MAS) said on Oct 14 that it will maintain the prevailing rate of appreciation in the value of the Singdollar versus a basket of currencies of its major trading partners. MAS refers to this value as the Singdollar nominal effective exchange rate (S$Neer) policy band.

MAS also narrowed its forecast for 2024 core inflation - which excludes private accommodation and transport costs, and better reflects household expenses - to an average of 2.5 per cent to 3 per cent, from an earlier range of 2.5 per cent to 3.5 per cent.

It also said that the gauge should end the year around 2 per cent.

In 2025, core inflation is expected to average around the midpoint of the forecast range of 1.5 per cent to 2.5 per cent, MAS noted.

The central bank has succeeded in bringing down core inflation, which hit 5.5 per cent at its peak in January 2023. Still, core inflation picked up to 2.7 per cent in August, after falling to 2.5 per cent in July, its lowest since 2022.

However, MAS bucked the global easing trend seen in the first interest rate cuts in four years by the US Federal Reserve, European Central Bank and Bank of England in the past few months.