MAS maintains Singapore dollar policy band amidst strong economic growth

Economy grew 1.3% QoQ in Q3.

The Monetary Authority of Singapore (MAS) has decided to maintain the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, keeping both its width and central level unchanged, following its July 2025 monetary policy review.

After trading near the top of the band in August, the S$NEER has eased in recent weeks as appreciation pressures subsided. On average, the S$NEER has remained broadly similar to levels observed in the three months prior to the July review.

Singapore’s economy grew 1.3% quarter-on-quarter in Q3 2025, slightly below Q2’s 1.5%, and 2.9% year-on-year, driven by manufacturing and domestic consumption.

MAS expects growth to moderate as trade-related activity normalises, but AI investments, construction, and financial services will continue to support the economy.

GDP expanded 3.9% year-on-year in Q1–Q3, and the output gap is expected to remain positive for 2025. Growth in 2026 is projected to slow to near-trend levels.

Core inflation eased to 0.4% in July–August 2025 from 0.6% in Q2, due to government subsidies, lower import costs, and slower wage growth.

MAS expects core inflation to rise gradually, averaging 0.5% for 2025 and 0.5–1.5% in 2026. CPI-All Items inflation is projected at 0.5–1.0% this year and 0.5–1.5% next year.

MAS continues to monitor tariff implementation and potential trade disruptions. Risks include further tariff increases, lingering global policy uncertainty, and a sharp correction in the AI investment boom, which could affect growth and financial market stability.