Singapore Loosens Monetary Policy Amidst Trade War Concerns

Singapore's central bank, MAS, loosened monetary policy for the second time, citing economic concerns from the US-China trade war. They also lowered core inflation expectations. The policy of gradual Singapore dollar appreciation continues, but at a slightly reduced rate.

MAS manages policy through the exchange rate, allowing the dollar to fluctuate within a band. They expect core inflation to average 0.5-1.5% in 2025, down from the previous forecast. Core inflation has fallen, dampened by soft consumer spending and government subsidies.

The central bank anticipates moderate price increases due to a weakening economic outlook. Global trade and GDP growth prospects have dimmed, and global financial conditions have tightened. The Ministry of Trade and Industry also lowered its GDP growth forecast. MAS sees uncertainty in the external environment, with potential negative impacts on Singapore's trade-related sectors.