Singapore has eased its monetary policy for the second time in six months, responding to slower economic momentum and global headwinds. This policy move comes after the latest figures showed that Singapore’s GDP rose only 0.1% in the first quarter, missing analyst expectations.
The Monetary Authority of Singapore (MAS) stated that the shift in monetary policy is aimed at supporting long-term economic balance and external competitiveness. Rather than tightening, the MAS opted to re-centre the exchange rate band, a measured approach to easing monetary policy without destabilizing the market. Officials say this decision allows Singapore more flexibility in adjusting to global economic uncertainty while still maintaining a cautious stance on inflation.
Although not labelled as traditional quantitative easing, the move reflects a light-touch intervention to stimulate momentum and support vulnerable sectors. Singapore has revised its annual growth expectations, with Singapore’s GDP now projected to expand between 1% and 2%, down from earlier estimates. Economists believe the updated monetary policy gives Singapore a better chance to protect jobs, support exports, and maintain overall financial stability.
“Flexibility is key right now,” said Alan Koh, a senior economist. “Singapore’s monetary policy reflects careful management, not reactive decision-making.“
In recent years, Singapore has used an exchange rate-centred monetary policy as its primary economic lever instead of traditional interest rate controls. MAS noted that core inflation is moderating, giving room for this shift in monetary policy while keeping a close watch on global energy prices.
The city-state’s approach is being seen as a middle path — responsive, without fully embracing aggressive tools like quantitative easing seen elsewhere. Manufacturing and electronics, major contributors to Singapore’s GDP, have seen a slowdown, leading to more targeted support through softer M policy. The government has also rolled out fiscal support programs, complementing monetary policy in sectors where trade and supply chains remain under stress.
Small businesses have expressed cautious optimism. “It feels like the government is stepping in before things get worse,” said cafe owner Min Tan. Singapore’s resilience lies in its foresight. Adjusting monetary policy before pressures build ensures less disruption and a quicker path to recovery. Even though global uncertainty continues, Singapore remains committed to calibrated policy choices that favor long-term sustainability.
The MAS emphasized that while easing, it will remain vigilant. Future changes in policy will depend on inflation, employment, and trade performance. If needed, the government may implement further strategies, including more stimulus tools like selective quantitative easing, although no plans are confirmed.
For now, Singapore stands out for its proactive, balanced use of monetary policy, signalling its readiness to adapt without straying from fiscal discipline.
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