MAS allows for stronger Singdollar, raises 2026 inflation forecasts on Iran war energy shock
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The Monetary Authority of Singapore has tightened its monetary policy stance to allow for a stronger currency in the face of soaring oil and natural gas prices due to the Iran war. The central bank has also raised its inflation forecasts for 2026 to an average of 1.5 per cent to 2.5 per cent, citing rising import costs and energy prices.
Singapore's central bank has tightened its monetary policy stance to allow for a stronger currency. The Monetary Authority of Singapore steepened the slope of the Singapore dollar nominal effective exchange rate policy band. This move signals that the currency will appreciate and dampen the impact of rising import costs. The central bank also raised its inflation forecasts for 2026. The forecasts were increased to an average of 1.5 per cent to 2.5 per cent due to rising energy prices and import costs. The Iran war has caused a surge in global oil and natural gas prices. The central bank expects prices of imported goods and services to increase in the coming quarters.
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