MAS maintains unchanged monetary policy for fourth consecutive time

According to MAS's monetary policy statement, the prevailing rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band will be upheld without adjustments to its width or centred level.

MAS acknowledged the resilience of global economic growth but noted potential dampening effects from prior monetary policy tightening and withdrawal of expansionary fiscal measures in major trading partners.

However, the latter part of 2024 is anticipated to witness a rebound in final demand alongside an easing of global monetary policy, with continued recovery in global manufacturing.

The growth trajectory is subject to uncertainties, including geopolitical conflicts and the timing of monetary policy adjustments.

Prospects for the Singapore economy in 2024 are cautiously optimistic, with GDP growth forecasted to range between 1% to 3%.

Recovery in the manufacturing and financial sectors is expected, supported by an upturn in the electronics cycle and global interest rate easing.

However, growth in domestic-oriented sectors is projected to normalize, slowing to pre-pandemic rates.

Unlike conventional central banks that rely on interest rates, MAS manages monetary policy by allowing the Singapore dollar to strengthen or weaken against the currencies of its primary trading partners within a confidential S$NEER band.

Adjustments to policy involve altering the slope, midpoint, and width of this band.

Since October 2022, when MAS re-centred the midpoint of its band, the central bank has not made any changes to its monetary policy.