Singapore Central Bank Tightens Policy for Second Time to Counter Oil Price Surge

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The Monetary Authority of Singapore tightened monetary policy for the second consecutive time on Monday, July 27, 2026, to address inflation risks from rising oil prices. Although domestic inflation remains low, MAS said it will slightly increase the slope of the exchange rate policy band, a smaller adjustment than in April, while keeping the width and centre of the band unchanged. Core inflation rose from 1.4% in May to 1.6% in June, while headline inflation stood at 1.9%, still within MAS's forecast range of 1.5% to 2.5% for this year. Research firm BMI, a unit of Fitch Solutions, warned that higher import costs typically pass through to consumer prices with a lag, suggesting Singapore's inflation is likely to accelerate in the coming months. Singapore relies almost entirely on energy imports and is sensitive to global oil prices, with Brent crude returning above 100 dollars per barrel last week. Singapore's economy remains robust, with second-quarter GDP expanding 5.7% year-on-year, beating analysts' expectations of 5.5%.

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