Singapore Delivers a Surprise Lesson on Inflation
The typically staid central bank unexpectedly tightened policy, yet another signal that higher prices have staying power.
A costly outing.
Photographer: Ore Huiying/BloombergSingapore isn’t a place for monetary policy surprises. The central bank’s strike against inflation — only the third unscheduled move in two decades — sends a clear signal that expectations of higher prices for longer have gone mainstream.
The Monetary Authority of Singapore slightly raised the rate of appreciation of its main currency band, meaning it will let the local dollar strengthen against peers to mitigate inflation. (The trade-dependent city-state relies on currency shifts to steer policy.) The MAS also raised its forecasts for consumer prices and warned of supply-chain constraints, while sounding fairly upbeat on the global economy.