The Monetary Authority of Singapore tightens monetary policy due to escalating inflation risks from the conflict in the Middle East.

The Monetary Authority of Singapore tightens its monetary policy for the first time in over three years, as the central bank prepares to address the economic impact of the Middle East war. Like central banks around the world, policymakers in Singapore are facing a dilemma: whether to take immediate action to curb inflation, risking harm to growth, or to wait and risk falling behind the situation. The Monetary Authority of Singapore said on Tuesday, "Prices of a wider range of imported goods and services are expected to rise in the coming quarters." The central bank slightly increased the slope of the nominal effective exchange rate policy band for the Singapore dollar, aiming to curb price increases. This move ends a standstill since July 2025. Over the past year, due to deteriorating external environment caused by tariffs and mild domestic inflation, the Monetary Authority of Singapore has twice loosened policies to boost growth. A survey of media shows that eight out of ten analysts predicted this decision on Tuesday, as the war disrupted key supply routes and boosted prices of oil and other commodities. The last time the Monetary Authority of Singapore tightened its policy was in October 2022, when the Russia-Ukraine war caused global inflation to soar, prompting many central banks to raise interest rates.