Key Points
- Singapore’s central bank is expected to leave its monetary policy unchanged on Thursday.
- A strong economy and stable inflation support the decision.
- The country’s GDP grew 4.8% in 2025, driven by a booming semiconductor sector.
- Core inflation is currently under control, at just over 1%.
Singapore’s central bank is expected to keep its monetary policy on hold at its review on Thursday, as a strong economy and stable inflation give policymakers little reason to change. Out of 16 analysts polled by Reuters, 15 believe the Monetary Authority of Singapore (MAS) will stand pat.
The city-state’s economy has been performing well, with GDP growing by 4.8% in 2025, well above the government’s earlier forecasts. A big reason for this is the booming semiconductor sector, which is benefiting from the global demand for artificial intelligence technology and rising memory chip prices.
Inflation, a major concern for central banks worldwide, also appears to be under control in Singapore. Core inflation was just above 1% in November, which has “reduced near-term pressure to ease,” according to one analyst.
While most experts expect the MAS to do nothing this week, there is some debate about what will happen later in the year. Some believe the central bank could start tightening policy in April as the global economic outlook improves. Others, like the economists at Bank of America, think a move could come as soon as this Thursday, citing signs that inflation might be strengthening.
The MAS will release its updated inflation forecasts on Thursday, providing a clearer picture of its thinking.
Singapore’s approach to monetary policy differs from that of other countries. Instead of setting interest rates, it manages the value of its currency against a basket of other currencies. Allowing the Singapore dollar to rise or fall within a certain range can influence import and export costs and help control inflation.
