SINGAPORE: The Monetary Authority of Singapore (MAS) on 15 July reported a net profit of S$19.7 billion for the financial year ended 31 March, up sharply from the S$3.8 billion recorded in the previous year, according to its annual report released today.
This surge is attributed to investment gains of S$31.4 billion, partially offset by a negative S$3.4 billion from currency translation and net expenses of S$8.3 billion related to money‑market operations to manage banking liquidity.
MAS managing director Chia Der Jiun observed that global markets remained resilient, with broad‑based returns across bonds, equities, developed and emerging markets, driving the S$31.4 billion in investment gains.
However, a stronger Singapore dollar led to a translation loss of S$3.4 billion. Chia clarified this did not reflect investment performance but arose because MAS reports in Singapore dollars.
Deputy managing director Jacqueline Loh noted that equities in particular outperformed expectations, with strong contributions from global growth and falling inflation.
No transfer to government fund; markets view remains benign
MAS recorded S$8.3 billion in expenses driven by active money‑market operations.
These were used to ensure sufficient liquidity in the banking system as part of its monetary‑management role.
Despite challenges from US trade policy uncertainty, markets remained calm.
Chia pointed out that equity markets rebounded from April’s volatility and reached new highs, credit spreads remained tight, and Asian currencies strengthened.
In April, US tariffs announced by President Donald Trump triggered market turbulence, but for now a 90‑day pause and later notices of tariffs due on 1 August have not dampened market confidence.
Chia warned of potential sharp pullbacks if trade conflict escalates or geopolitical tensions worsen, noting markets may be vulnerable due to benign pricing despite real risks.
Inflation outlook: subdued, yet uncertainties persist
MAS chief economist Edward Robinson forecasts low, stable inflation into 2026, underpinned by weak imported inflation, slower domestic costs, and reduced consumer spending .
The report observes that slowing global demand will keep imported goods inflation modest, while excess regional output should offset price pressures in Southeast Asia, including Singapore.
Locally, MAS expects slower unit‑labour‑cost growth as wage increases ease and productivity improves, and consumer spending softens—supported by government subsidies.
However, Chia cautioned that inflation outlook remains uncertain: disinflationary trends may strengthen if tariffs worsen economic activity, yet inflation could rebound if geopolitical or supply‑chain shocks intensify.
MAS applied more severe stress‑scenario modelling this year, finding that while overall corporates and households remain resilient, some segments are at risk.
Chia urged smaller, export‑oriented firms and households with unstable income to exercise caution. He recommended careful financial planning and avoiding large new loans in the current uncertain environment.
Growth in financial services sector shows steady momentum
Singapore’s financial‑services sector grew 6.8% in 2024, up from 3.1% in 2023, bringing the average rate between 2021–24 to 4.7%, in line with the Industry Transformation Map goal.
Key developments include:
- Banking resilience sustained during 2024.
- Insurance growth continued, with total assets rising 3.6% to S$456.4 billion .
- Foreign‑exchange activity reinforced Singapore’s position as a leading Asian FX hub.
- Corporate debt market recorded strong growth.
- Assets‑under‑management (AUM) exceeded S$6 trillion for the first time, up 12.2%, fueled by both traditional and alternative asset classes.
MAS emphasised that while wealth management remains strong, it will remain vigilant against financial crime, welcoming legitimate funds but cracking down on illicit flows.
Chia noted that growth is unlikely to continue at recent rapid pace given global uncertainty and expected slowdown in economic activity and financing needs .
Advancing quantum‑safe encryption and AI through sandboxing
MAS successfully completed its Quantum Key Distribution sandbox, conducted with banks and technology partners to explore quantum‑safe solutions ahead of future threats from quantum decryption.
In 2024, MAS pledged an additional S$100 million under its Financial Sector Technology & Innovation (FSTI 3.0) grant scheme to build quantum and artificial‑intelligence (AI) capabilities.
MAS also launched PathFin.ai, a programme enabling financial institutions to exchange experiences and use‑cases in AI implementation.
Twenty institutions across banking, insurance, capital markets, and payments have been onboarded so far.
Earlier in December 2024, MAS published an AI best‑practices information paper focused on generative AI risk management.
It outlined ethical risk‑governance frameworks, oversight forums, bias‑control measures, validation, monitoring, and “kill‑switch” provisions.
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