Monetary Authority of Singapore Tightens Policy for Second Consecutive Time Amid Inflationary Outlook

• MAS unexpectedly tightened policy for the second consecutive time on Monday.
• Increased S$NEER appreciation rate slightly, smaller than April’s adjustment.
• Preemptive move against rising energy-driven inflation from Middle East tensions.

The Monetary Authority of Singapore (MAS) on Monday unexpectedly tightened its monetary policy for the second consecutive time. The central bank announced a slight increase in the rate of appreciation of the Singapore dollar’s nominal effective exchange rate (S$NEER) policy band. This adjustment was described as “very slight” and was smaller than the previous tightening in April, with no changes made to the width or centre of the policy band. The MAS stated the move is a preemptive measure to manage expected inflationary pressures, particularly those stemming from renewed oil price surges and Middle East tensions, despite domestic inflation currently remaining subdued.