Singapore Raises Monetary Policy as Inflation Risk Increases

On Monday, Singapore's Monetary Authority unexpectedly tightened monetary policy for the second consecutive time due to rising oil prices, even with subdued domestic inflation. The authority will slightly increase the rate of appreciation of the Singapore dollar's nominal effective exchange rate policy band, although the width and center were left unchanged. Core inflation rose to 1.6% in June from 1.4% in May, and headline inflation was at 1.9%. The move indicates a proactive stance given Singapore's reliance on imported energy, which could influence future inflation rates for ordinary investors.