The Monetary Authority of Singapore (MAS) on Friday announced a slight easing of its monetary policy, its first such move since 2020 and the first adjustment in two years. The authority said it would slightly reduce the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, while maintaining the width of the policy band and the level at which it is centered.
It said the decision comes amid a slowdown in Singapore's economic growth momentum and a faster-than-expected moderation in core inflation this year. MAS projects core inflation, which excludes housing and personal transportation costs, to average 1.0 percent to 2.0 percent in 2025, while CPI-all items inflation is projected to average 1.5 percent to 2.5 percent.
Singapore's core inflation, measured by the consumer price index (CPI), eased to 1.8 per cent year-on-year in December, down slightly from 1.9 per cent in November, according to official data released on Thursday. The Ministry of Trade and Industry and the Monetary Authority of Singapore said the decline was due to softening of services inflation.
On a month-on-month basis, the core CPI increased by 0.5 percent. Private transportation and housing costs are not included in the core CPI to provide a more accurate measure of household expenses.
For the full year 2024, core inflation averaged 2.7 percent, down from 4.2 percent in 2023.
Meanwhile, inflation across all items in Singapore remained steady at 1.6 per cent year-on-year in December. Officials noted that “lower core and housing inflation was offset by a modest decline in personal transportation costs.”
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