The Monetary Authority of Singapore caught markets off guard by keeping its monetary policy settings unchanged, citing expectations that the global energy crisis and the artificial intelligence boom will both ease next year.

The central bank, which relies on exchange rate rather than interest rate adjustments as its primary policy instrument, announced in a statement on Wednesday that it would maintain the slope, width, and midpoint of its policy band. This marks the first time it has held steady following consecutive tightening moves at its April and July meetings.

Only three out of twenty economists surveyed by Bloomberg News had anticipated this outcome, with the majority having expected the authority to steepen the slope of the policy band. Most respondents had also predicted the central bank would retain a hawkish stance.

The authority revised its core inflation forecast for this year downward to 1.5%-2%, compared with its earlier projection of up to 2.5% made at the July meeting. It indicated that headline inflation should come in at around 2%.

With import costs and disruptions to energy and food supplies easing, both measures are expected to average between 1.5% and 2.5% next year.