CGS International
July 30, 2025

Singapore’s MAS Holds Steady: What Investors Need to Know After Two Rounds of Easing in 2025

Overview: MAS Maintains Policy as Growth Moderates

The Monetary Authority of Singapore (MAS) has decided to keep the current rate of appreciation of the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) policy band unchanged. This includes maintaining the band’s width and midpoint—a move that surprised some observers given the persistently subdued inflation readings in recent months. After two rounds of policy easing earlier in 2025, MAS’s latest stance underscores a cautious, data-dependent approach as Singapore faces a shifting economic landscape.

Monetary Policy Decision: Caution Amid Subdued Inflation

MAS has held the pace of S$NEER appreciation steady, with no adjustments to the band’s width or midpoint.
This comes after core inflation held flat at a subdued 0.6% for two consecutive months, below the 1.0% threshold.
MAS believes the current stance is appropriate to manage medium-term price stability risks, especially after having already delivered two policy easings in 2025.

Singapore’s Economic Outlook: From Strong Start to Cautious Second Half

The first half of 2025 saw robust economic activity, with GDP expanding by 4.3% year-on-year in Q2.
MAS anticipates a moderation in the second half, citing:
Fading effects of front-loaded activity.
Rising policy-related uncertainties.
Potential demand headwinds as previously delayed tariffs are implemented.
Full-year GDP growth is projected within a 0.0–2.0% range, with the report’s own forecast at 1.6%.

Inflation: Subdued but Risks Remain Two-Sided

Both core and headline inflation have averaged 0.6% for two months; MAS expects subdued price pressures in the near term.
Inflation is expected to edge up slightly in 2H25 as:
The impact of enhanced healthcare subsidies fades.
Earlier declines in global oil prices lose their disinflationary effect.
2025 forecasts:
Core and headline inflation: 0.0–1.5% (report forecast: 1.0%).
Risks:
Geopolitical shocks could push up imported energy and shipping costs.
Weak global or domestic growth could keep core inflation low for longer.

MAS Policy Outlook: Measured and Data-Dependent

The MAS’s latest guidance emphasizes a balanced outlook, with both upside and downside risks.
Key uncertainties include:
Potential for higher US tariffs on Singapore (beyond the current 10% baseline).
Impacts on trade and inflation dynamics if such moves materialize.
Further monetary easing is seen as unlikely unless growth slows sharply or disinflationary pressures return.
The MAS is expected to keep its current policy settings unchanged at the next meeting.

Historical MAS Policy Actions Table

Key Macroeconomic Forecasts for Singapore and the Region

Regional Comparison
– Malaysia, Indonesia, and Thailand are also included in the forecast tables, covering GDP, inflation, unemployment, fiscal and current account balances, international reserves, and currency rates.
– Notably, Singapore maintains a sizable current account surplus and robust reserves, despite moderate GDP growth projections.

Market Takeaways and Investment Implications

The MAS’s policy signals a period of “wait and see” as external uncertainties and domestic inflation risks persist.
Investors should note the potential for increased volatility if US tariff policy shifts or if geopolitical events disrupt energy and shipping markets.
The Singapore Dollar remains near the upper bound of its policy band, underscoring MAS’s confidence in its current stance.
Core and headline inflation are likely to remain contained, offering a stable macro backdrop for equity and fixed income markets in Singapore.
The labor market remains resilient, with unemployment projected to stay low.

Conclusion: MAS in Holding Pattern as Headwinds Gather

After two policy easings in 2025, MAS’s steady hand reflects both a strong first-half recovery and a wariness of looming risks. The monetary authority’s balanced, data-driven approach should reassure investors seeking stability in a region marked by uncertainty. With inflation risks skewed in both directions and growth expected to moderate, Singapore’s policy posture is set to remain accommodative, but on high alert for any shocks that could alter the trajectory.

For further insights or direct contact, the lead economists behind the report are Mohamed Afham Zulghafir and Nazmi Idrus at CGS International.