MAS to maintain policy settings—analysts

Both banks cite weak global demand and subdued prices as reasons for the expected pause.

RHB and UOB both expect the Monetary Authority of Singapore (MAS) to maintain its current monetary policy stance, according to their respective economic reports released on 23 April

“We keep our view for the Monetary Authority of Singapore (MAS) to maintain its policy parameters unchanged this year, with the balance of risk to further ease in H2 2025,” RHB wrote.

The report cited slower-than-expected inflation and a decline in global commodity prices as key reasons for subdued price pressures.

Similarly, UOB wrote that “thresholds for an adjustment to a zero percent appreciation stance (i.e. complete slope flattening) have likely already been met,” adding that its base case, with an 80% probability, calls for MAS to ease policy further in the upcoming July 2025 Monetary Policy Statement (MPS).

UOB also noted that the March 2025 inflation outturn “opens the door to a possible off-cycle flattening (20%) of the S$NEER slope ahead of the scheduled Jul 2025 MPS.”

RHB said that looking ahead, Singapore’s inflation trajectory will be influenced by both external and domestic factors.

“Downside risks could highly stem from (1) a slowdown of global demand and lower commodity prices, (2) a relatively strong S$NEER, and (3) a drag in global growth, especially in the US and China underpinned by escalating tariff tensions,” RHB wrote.
Meanwhile, UOB said that further downside risks to its core inflation forecast could emanate from excess supply conditions in the region exacerbated by a weaker global demand owing to the impact of tariffs.

MAS had lowered its core inflation forecast to a range of 0.5% to 1.5% in its April MPS. Both RHB and UOB now expect core inflation to fall below this range. RHB maintained its full-year core inflation forecast at 1.1%, whilst UOB revised its forecast to 0.7%.