MAS ready for ‘timely and appropriate’ monetary response if economy deteriorates

The Monetary Authority of Singapore (MAS) will ensure a “timely and appropriate” response to any unexpected economic weakening and consider other financial sector measures, said Minister-in-charge of MAS Gan Kim Yong on Tuesday (Sep 16).

In an Addendum to the President’s Address, he noted that MAS has eased monetary policy twice – in January and April – in response to Singapore’s “sustained decline” in core inflation.

“With increasing global fragmentation, we must be ready for major shifts in production and supply chains,” said Gan, who is also deputy prime minister.

MAS will stay vigilant of the impact of such changes on growth and inflation, he said.

“If cyclical economic conditions weaken unexpectedly during this period, MAS will ensure that the monetary policy response is timely and appropriate, while considering other supportive measures in conjunction with the financial sector.”

The various ministries are releasing their plans for the new term of government in Addenda to the President’s Address.

Developing the financial sector

MAS aims to uphold Singapore’s standing as a trusted financial centre and develop it as an innovative one, said DPM Gan.

It will maintain trust “through robust supervision and risk-proportionate regulation”, and is considering other safeguards against scams.

As for developing the financial sector, MAS will continue to work with financial institutions to deepen capabilities across key asset classes such as banking, foreign exchange, insurance, asset and wealth management, and payments.

The Equities Market Review Group, convened in August 2024, has recommended various measures and is considering additional proposals, he noted. It will complete its final report by the end of 2025.

MAS is also supporting financial institutions to adopt artificial intelligence (AI), and facilitating industry efforts to expand the use of tokenisation.

For the latter, plans include forming broader commercial networks to deepen liquidity of tokenised assets; improving interoperability across digital asset market infrastructures; fostering standardised frameworks; and enabling access to common settlement facilities.

Green transition

MAS also remains committed to supporting Asia’s transition to a low-carbon economy, aiming to mobilise up to US$5 billion for regional decarbonisation projects through its Financing Asia’s Transition Partnership (Fast-P).

A key fund in the initiative secured US$510 million in its first fundraising round that closed on Sep 8. A new Fast-P office will also facilitate the deployment of up to US$500 million of concessional capital from the government, alongside capital from other partners.

To support the growing sustainable finance market, MAS will ensure the workforce is equipped with the right skills, under the Sustainable Finance Jobs Transformation Map.

“Amid global uncertainty, MAS remains committed to ensuring medium-term price stability,” concluded DPM Gan. “We will continue to stay vigilant to risks and deployments in global markets that affect Singapore, and ensure that the financial system remains resilient and competitive.”

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