Singapore Stands Pat: MAS Holds Monetary Policy Amid Growth, Global Headwinds

Singapore's central bank, the Monetary Authority of Singapore (MAS), opted to keep its monetary policy unchanged today, following two easing measures earlier in 2025.

The MAS will maintain the existing width, level, and slope of its policy band, which manages the Singapore dollar’s (SGD) exchange rate against a basket of currencies. This signals the central bank’s assessment that the current policy stance provides sufficient flexibility to address potential medium-term risks to price stability.

Singapore's economy displayed unexpected vigor in the second quarter of 2025, expanding 4.3% year-on-year, accelerating from 4.1% in the first quarter. Quarter-on-quarter growth reached 1.4%, rebounding from a 0.5% contraction in the prior period, exceeding consensus expectations, driven by strong manufacturing output and trade-related services.

However, the MAS tempered this positive assessment with a cautionary outlook.

The central bank projects that GDP growth will moderate during the second half of 2025, pulling back from the strong pace seen in the first six months. The MAS specifically cited potential headwinds stemming from global trade tensions and the evolving landscape of international tariffs.

“Prospects for the Singapore economy remain subject to significant uncertainty, especially in 2026,” the MAS said in its official statement. “Changes in effective tariff rates worldwide could impact the performance of Singapore’s externally-oriented sectors.”

The decision to hold policy steady follows two easing moves earlier in 2025, giving the MAS what it considers “an appropriate position to respond to risks to medium-term price stability.” This language suggests the central bank is prepared to adjust its stance if global conditions deteriorate significantly.

The Ministry of Trade and Industry (MTI) has maintained its 2025 GDP growth forecast at 0.0-2.0% for the full year, with private-sector forecasts clustering around the lower end (median 1.7% in the latest MAS survey). The outlook for 2026 has also been trimmed due to rising global trade frictions and geopolitical risk.

The full Q2 Economic Survey of Singapore, with more granular data on sector performance, inflation, and labor markets, will be released next month.