The Monetary Authority of Singapore (MAS) announced on Monday that it will tighten monetary policy for a second consecutive time, citing renewed oil price surges as a key risk to inflation. The move is preemptive, as domestic inflation remains subdued.
The MAS said it will increase the rate of appreciation of the Singapore dollar's nominal effective exchange rate (NEER) policy band. This is intended to curb imported inflation, particularly from higher energy costs.
Oil prices have climbed recently due to supply concerns and geopolitical tensions. The MAS noted that while core inflation is currently low, the risk of a rebound from energy costs warrants action.
Economists had widely expected the move, as the central bank has prioritized price stability amid global uncertainties. The MAS does not target interest rates but uses the exchange rate as its main policy tool.
