Singapore’s Central Bank (MAS) to announce Policy Rates

Navigating Inflation and Trade Headwinds

The Monetary Authority of Singapore (MAS) is expected to hold its exchange-rate policy steady on 14 October 2025, as it grapples with subdued inflation, escalating US-China trade tensions, and a resilient domestic economy. Unlike traditional central banks, MAS manages the Singapore dollar’s trade-weighted appreciation within a confidential band to ensure price stability over the medium term. A Bloomberg survey indicates strong consensus, with 16 of 20 economists predicting no change, though four, including DBS Group Holdings, foresee potential easing after earlier loosening in January and April. “The central bank appears to be waiting for more definitive evidence of economic deterioration before making another move,” says Lloyd Chan of MUFG Bank, capturing MAS’s cautious stance amid a complex global landscape. Domestic indicators paint a robust picture. Consumer spending in August outpaced forecasts, reflecting sustained household confidence, while manufacturing activity hit a purchasing managers’ index of 56.4 in September, marking eight consecutive months of expansion. The property market also shines, with private home prices logging their steepest quarterly rise in three quarters, driven by renewed apartment sales. “Singapore’s economy has shown steady momentum despite external risks,” notes Business Today, underscoring the domestic strengths that bolster MAS’s decision to hold steady. Core inflation eased for two consecutive months, with projections of 0.5% to 1.5% for 2025, and imported price pressures are expected to “remain moderate,” reducing the need for tightening.

Global trade dynamics pose significant challenges. The US-China trade war has intensified, with China imposing restrictions on rare-earth mineral exports and US President Donald Trump announcing 100% tariffs on Chinese goods. “The trade war between the US and China flared up again in recent days,” reports the Straits Times, highlighting risks to Singapore’s export-driven economy, particularly its semiconductor sector, which accounts for 6% of GDP. The Economic Development Board notes Singapore’s role in producing 10% of global chips and 20% of semiconductor equipment, making it vulnerable to supply chain disruptions. Concurrently, preliminary third-quarter GDP data, due alongside the MAS announcement, is expected to show slower growth than Q2, adding pressure to the bank’s deliberations. Regionally, central banks are diverging. Indonesia and New Zealand have deepened rate cuts to support growth, while Thailand, Malaysia, and Australia hold steady, assessing prior moves. The US Federal Reserve’s September rate cut—its first since December—introduces additional liquidity, potentially affecting currency dynamics. The Singapore dollar, up over 5% against the US dollar in 2025, has stabilised since July, aligning with MAS’s stability goals but raising concerns about export competitiveness amid trade barriers. A semiconductor upswing, driven by AI-related investments, offers a potential buffer. “One potential buffer for Singapore is the rebound in the global semiconductor cycle, supported by robust AI-related investments,” Business Today reports, suggesting resilience in a key sector.

For global investors, MAS’s anticipated policy hold signals continuity in a volatile environment, potentially stabilising Asian forex markets. The Singapore dollar’s steady trajectory may anchor regional currencies, particularly as the US dollar adjusts post-Fed easing. Markets will scrutinise the 14 October statement for hints of tweaks to the policy band’s slope, width, or midpoint, which could signal MAS’s inflation-growth priorities. The semiconductor boom could lift local tech equities, while fiscal measures planned for the 2026 Budget—potentially including cash transfers and employment support—may sustain consumer-driven sectors. “This means monetary policy can sit on the bench,” says ANZ’s Khoon Goh, highlighting the government’s fiscal role in addressing future slowdowns. Trade risks remain a wildcard. Escalating US tariffs could dampen export volumes, pressuring Asian markets, while supply chain frictions may elevate costs in electronics and pharmaceuticals. Conversely, AI-driven chip demand could attract capital inflows, supporting Singapore’s economic resilience. The Q3 GDP release will provide critical context, with a projected slowdown likely to temper optimism without prompting immediate policy shifts. Singapore’s strategic balancing act underscores its role as a small, open economy navigating global turbulence with precision.