The Monetary Authority of Singapore, which uses the exchange rate as its main policy tool rather than interest rates, said Tuesday it would increase the slope of its policy band. There was no change to its width and the level at which it is centered. Fifteen out of 18 economists in a Bloomberg survey predicted the decision.

The MAS, which holds four policy reviews per year, had loosened its settings twice in 2025 – January and April – to help support growth, then stood pat through the rest of last year as the trade-reliant nation largely shrugged off the impact of president Donald Trump’s tariff onslaught.

The MAS review comes as global bets on rate cuts this year have rapidly unravelled in the face of the oil price spike from the US-Israeli attack on Iran which has expanded to the broader Gulf region and all but stalled global trade via the Strait of Hormuz.

Singapore’s gross domestic product shrank 0.3% in the first three months of the year compared to the fourth quarter of 2025, according to an advance estimate from the ministry of trade and industry on Tuesday.

The manufacturing sector saw a sharp 4.9% quarterly drop, a pullback from the 4.5% expansion in the October-December period when Singapore’s factories enjoyed a boost from the artificial-intelligence boom.

Still, GDP expanded 4.6% year-on-year in the first quarter. The ministry had raised its 2026 GDP growth forecast to 2%-4% in February, from an initial estimate of 1%-3%.