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The Star
2 days ago
- Business
- The Star
Singapore keeps monetary settings unchanged as trade tensions ease
A view of the Monetary Authority of Singapore's headquarters. REUTERS/Darren Whiteside/File Photo SINGAPORE: Singapore's central bank on Wednesday kept its monetary policy settings unchanged after economic growth surprised to the upside in the second quarter. The Monetary Authority of Singapore said it will maintain the prevailing rate of appreciation of its exchange rate-based policy band. The width and the level at which the band is centred were unchanged. "The risk of a sharp step-down in global growth in the near-term has receded along with the general de-escalation in trade tensions as well as more benign financial conditions since April," the MAS said in a statement. It added it was in an appropriate position to respond to risks after two previous easings. OCBC economist Selena Ling said the MAS was keeping its ammunition dry and waiting to see the outcome of reciprocal tariffs given the two-way risks for inflation. "Tariff impact on Chinese exports to rest of the world may be disinflationary, but geopolitics and supply chain recalibrations may be inflationary, so the net impact still has to be assessed," said Ling. Half of the 12 analysts polled by Reuters ahead of the review expected the MAS to keep policy settings unchanged while the other half forecast an easing of policy. The MAS eased monetary policy in January and April this year on growth concerns due to U.S. tariffs after holding settings since a tightening in October 2022. The economy, however, is posting better-than-expected results as exporters rushed out goods to beat the imposition of U.S. tariffs. Singapore avoided a technical recession after the economy grew 1.4% quarter-on-quarter in the second quarter, according to preliminary government data. Authorities in Singapore have warned that growth is likely to slow in the second half of 2025 as the export and production frontloading tapers off. "Prospects for the Singapore economy remain subject to significant uncertainty, especially in 2026," the MAS said on Wednesday. In April, the government reduced its GDP forecast to 0.0% to 2.0% from 1.0% to 3.0%. Core inflation in the city-state fell to 0.6% year-on-year in June from a peak of 5.5% in early 2023. Instead of using interest rates, Singapore manages monetary policy by letting the local dollar rise or fall against the currencies of its main trading partners within an undisclosed trading band, known as the Singapore dollar nominal effective exchange rate, or S$NEER. It adjusts policy via three levers: the slope, mid-point and width of the policy band. - Reuters
The Star
21-07-2025
- Business
- The Star
Singapore central bank to place S$1.1bil with asset managers to boost stock market
A view of the Monetary Authority of Singapore's headquarters. REUTERS/Darren Whiteside/ SINGAPORE: Singapore's central bank will place S$1.1 billion ($856.36 million) with three asset managers as part of a S$5 billion programme to boost the stock market, it said on Monday, with more co-investments to be announced late this year. The move comes as part of an ongoing probe into the local stock market by the Monetary Authority of Singapore and a review group set up in August last year, with the aim of strengthening the way the market functions. The fund managers selected as part of Singapore's Equity Market Development Programme (EQDP) are Avanda Investment Management, JP Morgan Asset Management and Fullerton Fund Management, which is owned by Singapore's sovereign fund Temasek. MAS said it considered "a range of factors" when choosing the managers, including the "alignment of their proposed fund strategies with EQDP objectives" and their commitment to contribute to the growth of Singapore's asset management capabilities. It added that more than 100 global, regional and local asset managers have shown interest in receiving funds for co-investment under the development programme, and that it will review the submissions in batches to speed up the appointment of asset managers and the deployment of capital. In February, MAS and the Financial Sector Development Fund (FSDF) announced that the S$5 billion programme would invest in strategies managed by Singapore-based asset managers that "have a strong focus on Singapore listed equities and broaden investor participation beyond large-cap stocks", the central bank said. Since Singapore announced that it would set up the review group to revive the stock market in August last year, the benchmark Straits Times Index had gained 23.9% as of July 18. ($1 = 1.2845 Singapore dollars) - Reuters
The Star
23-05-2025
- Business
- The Star
Asia must not succumb to tariff retaliation, Singapore cbank official says
REUTERS/Darren Whiteside/File Photo SINGAPORE: Asian economies must remain agile and not succumb to tit-for-tat tariff retaliation, a deputy managing director of the Monetary Authority of Singapore said on Friday. Retaliatory tariffs would lead to negative supply shifts that would worsen the growth-inflation trade-off and complicate monetary policy, Edward Robinson, who is also the MAS's chief economist, told a monetary policy conference. "They should continue to keep the old advice to avoid throwing rocks into their own harvest and intensify regional trade integration initiatives, including in digital and services trade, and investment," Robinson said. Protectionism and import taxes disrupt resource allocation and lower the consumer surplus as domestic households face higher prices and fewer choices, he said. "Both the targeted and the tariff-imposing economies suffer." Despite having a free-trade agreement and running a trade deficit with the United States, Singapore has been slapped with a 10% baseline tariff rate by Washington. Other Southeast Asian countries have been threatened with much higher tariffs, although they have been delayed until July and an interim 10% tariff is in place for now. Singapore on Thursday reported a 0.6% contraction in the first quarter, even before U.S. tariffs were announced, putting the economy at risk of a technical recession. The MAS eased policy at reviews in January and April this year. Speaking on Thursday after the GDP data, Robinson said the current monetary policy stance remained appropriate. - Reuters
