By Megan Cheah
SINGAPORE--Singapore's central bank tightened monetary policy settings for the first time in over three years as it braces for the economic fallout from the war in the Middle East.
Policymakers in the city-state are walking a tightrope being trod by central banks the world over: act now to cap inflation at the risk of hurting growth, or wait and take the chance of falling behind the curve.
"Prices of a wider range of imported goods and services are expected to increase in the quarters ahead," the Monetary Authority of Singapore said Tuesday. It slightly increased the rate of appreciation of the Singapore dollar nominal effective exchange rate policy band, aiming to curb rising prices.
The move ends a pause stretching back to July 2025, a year during which the central bank loosened policy settings twice to prop up growth as tariffs darkened the external environment and inflation at home stayed benign.
Tuesday's decision was expected by eight out of 10 analysts in a Wall Street Journal poll as war disrupts critical supply routes, driving up prices of oil and other commodities.
The last time the MAS tightened policy settings was in October 2022, the year that Russia's invasion of Ukraine sent global inflation soaring, causing many central banks to hike rates.
Write to Megan Cheah at megan.cheah@wsj.com
(END) Dow Jones Newswires
04-13-26 2024ET
