Singapore's central bank unexpectedly tightened its monetary policy on Monday, citing persistent inflation risks stemming from elevated energy costs linked to the ongoing Middle East conflict. According to Reuters, the move caught most economists off guard, as the majority had expected policymakers to leave settings unchanged.
The Monetary Authority of Singapore (MAS) said it would slightly increase the rate of appreciation of its exchange rate-based policy band, known as the Singapore dollar nominal effective exchange rate (S$NEER). The adjustment is smaller than the tightening announced in April. The central bank left the width of the policy band and its midpoint unchanged. As is customary, the MAS did not disclose the exact magnitude of the policy adjustment.
