A Little Intensity 

The Central Bank of Singapore has fastened the lead on its once liberal monetary policy early on Tuesday in the first of such stringent moves in 7 years as instability trails the global supply chain and inflation spreads in the region.

The country’s economy that is built and heavily dependent on global trade is vulnerable to the slightest shaking in global inflation, and its central bank’s swift response is in reaction to pressures on other economies in Asia.

The Head of Treasury Research and Strategy at the Oversea Chinese Banking Corporation (OCBC), Ling Selena, has said she expects further tightening of the monetary policy in April, adding that what occurred on Tuesday is but just a little tightening.

She clarified that if the central bank had carried out a stronger tightening, then there would be no expectations for further tightening in April or anytime soon in the future but this slight measure would make it necessary.

The body which regulates Singapore’s monetary policy via its exchange rate settings, the Monetary Authority of Singapore (MAS), has announced that it will increase the appreciation rate of its policy’s band. The bandwidth, widely known as the Nominal Effective Exchange Rate (NEER), and its central level will remain untouched.

The Monetary Authority of Singapore normally holds its policy review meetings two times a year, April and October. The last time there was an impromptu meeting was in January 2015 which was to relax the country’s policy following the global crude oil price collapse.


In 2021, most Asian-Pacific countries ignored inflation threats that rocked a lot of European markets up to the US, but that mood seems to have changed.

In Australia, the major inflation grew to its highest yearly level since 2014 in quarter 4 of 2021, posing a challenge to the central bank’s gentle and low-interest-rate policies. Japan on the other hand acknowledged a heavy inflation pressure even though they have a strong price growth.

In the US, investors and traders are eagerly expecting the Federal Reserve to increase interest rates by March.

Singapore made the policy move a day following the data release revealing core inflation in the country rose last December at the fastest rate in about eight years. 

The Monetary Authority of Singapore said in a statement that this new step is based on a pre-emptive stance to an appreciative one.

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