MAS expected to ease Singdollar policy on April 14 as Trump tariffs risk growth: Survey

SINGAPORE – Singapore’s central bank is expected to ease monetary policy settings further, days after US President Donald Trump unleashed the steepest tariffs in a century, threatening to disrupt global trade and sparking risk of retaliation. 

All 14 economists in a Bloomberg survey forecast that the Monetary Authority of Singapore (MAS), which uses the exchange rate rather than interest rates to stabilise prices, will reduce the slope in the policy band of the Singapore dollar’s nominal effective exchange rate on April 14.

The slope guides the rate at which the Singapore dollar appreciates. If the slope is reduced, this means the currency will be allowed to strengthen at a slower pace. 

While the US dollar gained against many Asian currencies in the wake of Mr Trump’s election victory in November 2024, the picture has become more nuanced in the past month. Investors have been selling US assets in response to

higher-than-expected tariffs,

while the Singapore dollar has gained roughly 2.9 per cent against its American counterpart in 2025.

“The global outlook has deteriorated significantly,” said Mr Khoon Goh, head of Asia research at Australia & New Zealand Banking Group, who is predicting a shift in the policy slope to 0 per cent. “With core inflation forecast to stay well below its long-term average levels, the MAS is now firmly focused on growth.”

Singapore, which was hit with a 10 per cent US tariff, got off relatively lightly compared with China’s 145 per cent, but as an export-reliant economy, the nation’s success rests on the health of its trading partners. Prime Minister Lawrence Wong has warned that growth in 2025 will be “significantly impacted” and Singapore could tip into a recession.

As a result, Citigroup sees a greater chance of “a more aggressive” easing by the MAS on April 14, while still sticking with its “measured” 50 basis-point slope reduction call. 

Another option in the MAS’ toolkit is to re-centre its policy band downwards, effectively allowing the currency to depreciate. Barclays is among those that see a small probability of the MAS reducing the slope as well as re-centring its policy band downwards.

UBS estimates the drag on economic growth from tariffs will be greatest for Thailand and Singapore, followed by Malaysia, Indonesia and the Philippines.

Citigroup’s Ms Johanna Chua cited data from the Organisation for Economic Cooperation and Development to estimate almost 7 per cent of Singapore’s gross domestic product is driven by US spending, the second-highest among South-east Asian countries, as she pointed to downside risks to the nation’s outlook from the new US import taxes. That assessment preceded Mr Trump’s announcement of a 90-day pause on higher tariffs, while raising duties on China to 145 per cent. 

“Significant global retaliation could mean further downside to these sensitivities,” UBS economists wrote in a note on April 7, predicting a “larger-than-usual” slope reduction to a 0 per cent stance. 

MAS eased its Singdollar policy in January for the first time in five years, and the case to support the economy has become even stronger following Mr Trump’s tariffs and the ensuing global market ructions. 

“The question is how much to flatten the slope? The MAS has never gone to zero slope in one fell swoop so it could be somewhat alarming to market watchers,” said Ms Selena Ling, head of research and strategy at OCBC Bank.

“Given that a lot of external economic and trade uncertainties remain, a gradual and incremental approach may be wise.” BLOOMBERG