Singapore MAS Tightens Policy Again as Brent Tops $100 and Inflation Risks Rebuild
Updated
Updated · CNBC · Jul 27
Singapore MAS Tightens Policy Again as Brent Tops $100 and Inflation Risks Rebuild
3 articles · Updated · CNBC · Jul 27
Summary
MAS unexpectedly tightened for a second straight meeting, slightly increasing the Singapore dollar policy band’s appreciation rate while leaving its width and center unchanged.
Brent’s move back above $100 a barrel and Singapore’s heavy reliance on imported energy drove the pre-emptive step, even with June core inflation still low at 1.6% and headline inflation at 1.9%.
The move caught markets off guard after economists had largely expected no change, underscoring MAS concern that imported cost pressures will filter into consumer prices with a lag.
OCBC now sees headline inflation rising to about 2.5% and core inflation to 2.3% in coming months, with inflation not dropping below 2% until the second half of 2027.
Singapore’s economy has so far absorbed the oil shock, with second-quarter GDP growing 5.7% from a year earlier, beating the 5.5% Reuters estimate and the government’s 2%-4% full-year forecast range.