Singapore Central Bank Holds Policy Steady, adjusts Economic Outlook. Singapore’s central bank maintained its monetary policy settings for the fifth consecutive time while adjusting its economic outlook, forecasting cooler inflation and stronger growth.

The Monetary Authority of Singapore (MAS) announced on Friday that it will uphold the current rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band. The width and level at which the S$NEER policy band is centered will remain unchanged.

The decision aligns with expectations, as all 14 economists and analysts surveyed by The Wall Street Journal predicted this outcome. Singapore Central Bank Holds Policy Steady, adjusts Economic Outlook.

Friday’s decision is made in the context of steady growth and easing inflation within the city-state. Consumer prices rose by a cumulative 2.9% in the first six months of the year, compared to a 5.6% increase in the same period last year. Economic growth in the second quarter surpassed expectations and appears poised to improve after a weak performance in the previous year.

The MAS anticipates economic momentum to strengthen in the latter half of the year, with GDP growth projected to align closer to its potential rate of 2%-3% for the full year. In April, the MAS had forecast GDP growth to fall between 1%-3%.

Growth is expected to be driven by Singapore’s manufacturing and financial sectors, which are likely to benefit from the broadening technology sector upturn and anticipated easing of global interest rates. Domestic-oriented sectors are also projected to normalize to pre-pandemic growth rates.

The central bank also revised its outlook on inflation, noting moderate imported inflation and easing domestic cost pressures. This outlook adjustment reflects a more stable economic environment, with the MAS expressing confidence in the country’s economic trajectory for the remainder of the year.