Singapore Tightens Monetary Policy as Oil Prices Surge

Singapore's Monetary Authority has tightened its monetary policy for the second time in recent months, responding to rising oil prices and inflation concerns. The move comes as Brent crude prices have climbed back above $100 a barrel following an attack on Saudi tankers in the Red Sea.

The MAS 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. However, the width of the band and its center level remain unchanged.

Core inflation in Singapore ticked up to 1.6% in June from 1.4% in May, near the bottom of the MAS's forecast range for this year. Transportation fuel prices have surged since the U.S.-Iran conflict began, but softer services inflation has helped offset some of the upward pressure on prices.

The economy has so far shrugged off the turmoil, with Singapore's GDP expanding 5.7% in the second quarter from a year earlier, beating estimates and surpassing the government's full-year projection of 2-4% growth.