Singapore on Monday tightened its monetary policy for a second consecutive time, moving preemptively against a renewed oil price surge even as inflation at home stays subdued.
The Monetary Authority of Singapore said it will increase the rate of appreciation of the Singapore dollar's nominal effective exchange rate policy band "very slightly," with the adjustment smaller than April's. The width of the band and the level at which it is centered were left unchanged.
Singapore's core inflation, which excludes accommodation and transportation costs, ticked up to 1.6% in June from 1.4% in May, near the bottom of the MAS's 1.5%–2.5% forecast range for this year, with headline inflation at 1.9%.
While transportation fuel prices quickly rose since the onset of the U.S.-Iran conflict, softer services inflation, particularly healthcare, communication, and education, helped offset much of the upward pressure on prices.
The economy has so far shrugged off the turmoil as AI demand powers electronics exports.
Singapore's gross domestic product expanded 5.7% in the second quarter from a year earlier, beating the 5.5% median estimate in a Reuters survey.
