The Monetary Authority of Singapore (MAS), which uses exchange rates rather than interest rates to control policy, said it would “reduce slightly the slope” of the dollar trading band, which it said “will ensure medium-term price stability”.

The local dollar is pegged to a basket of currencies of its main trading partners and is allowed to rise or fall within an undisclosed band.

In a statement, the MAS said there would be no change to the width of the policy band or the level at which it is centred.

The last time the MAS eased monetary policy was in March 2020, when Singapore was headed for a pandemic-sparked recession.

It said it expected core inflation to average 1-2% this year, compared with the 1.5-2.5% projected in October.

“Singapore’s imported costs should stay moderate, reflecting forecasts of global oil price declines and favourable supply conditions in key food commodity markets,” it said in the statement.

Singapore’s economy grew a forecast-topping 4% in 2024, according to advance estimates this month, but it is seen slowing to 1-3% in 2025, the MAS said.

Singapore’s economic performance is often seen as a barometer of the global environment because of its dependence on international trade.