Monetary Authority of Singapore policy statement:

  • Will maintain the prevailing rate of appreciation of the S$NEER policy band
  • There will be no change to its width and the level at which policy band is centred


  • Barring any further global shocks, the Singapore economy is expected to strengthen in 2024
  • MAS core inflation is likely to remain elevated in the earlier part of the year
  • Current monetary policy settings remain appropriate
  • Sustained appreciation of the policy band will continue to dampen imported inflation and curb domestic cost pressures
  • MAS core inflation should decline gradually and step down by q4, before falling further next year
  • MAS core inflation is projected to slow to an average of 2.5–3.5% for 2024 as a whole
  • 2024 GDP growth projected to come in between 1–3%
  • Slightly negative output gap in 2023 will narrow in the second half of 2024.
  • Excluding impact of increase in the GST rate this year, core inflation is forecast at 1.5–2.5% for 2024
  • CPI-all items inflation in 2024 is now forecast to be lower at 2.5–3.5%
  • Will closely monitor global and domestic economic developments, and remain vigilant to risks to inflation and growth
  • Excluding the effects of the increase in the GST rate, headline inflation is forecast at 1.5–2.5% for 2024
  • Setting aside transitory impact of GST increase, core inflation is forecast to decline gradually over 2024
  • Both upside and downside risks to the inflation outlook remain
  • On domestic front, wage growth should ease this year as labour market tightness dissipates
  • Unexpected weakening in the global economy could induce a faster easing of cost and price pressures
  • MAS as core inflation expected to rise in current quarter due in part to one-off impact of 1%-point hike in GST from January this year

SGD update:

usd sgd mas January 2023 2


Note that the MAS's key monetary policy tool is its exchange rate policy. It adjusts the exchange rate of its dollar (SGD) instead of changing domestic interest rates like most other economies.

It manages the SGD exchange rate against a basket of currencies of Singapore's major trading partners.

  • sets the path of the policy band of the Singapore dollar nominal effective exchange rate (S$NEER)
  • this serves to strengthen or weaken the local currency against those of its main trading partners

S$NEER is a combined index made up of bilateral exchange rates between Singapore and its major trading partners

  • is a trade-weighted exchange rate

MAS permits the S$NEER to move up and down within the policy band (exact levels are not disclosed). If it goes out of this band, the MAS steps in by buying or selling Singapore dollars.

The policy band has three parameters that the MAS can adjust:

  • the slope, the level and the width
  • adjusting the slope will influence the pace at which the Singapore dollar strengthens or weakens
  • adjusting the level, or mid-point, of the policy band allows for an immediate strengthening or weakening of the S$NEER,
  • widening the policy band allows for more volatility of the S$NEER
  • these parameters are what are reviewed

The MAS made an unexpected announcement in October 2023 that it was switching to quarterly meetings to assess monetary settings from 2024. It had been meeting only twice a year, in April and October (but could, and did from time to time, meet more often, if conditions demanded an immediate change in settings, such as in 2022 when high inflation triggered two off-cycle moves).