The Monetary Authority of Singapore increased the slope of its Singapore dollar nominal effective exchange rate policy band by roughly 50 basis points on April 14, allowing the Singapore dollar to strengthen at an estimated pace of about 1% per year. This move follows shipping disruptions in the Strait of Hormuz since late February 2026, which have driven up global energy costs and reignited inflationary pressures. The MAS raised its 2026 inflation forecasts, projecting both core and headline CPI at 1.5% to 2.5%, up from a previous range of 1.0% to 2.0%. Singapore’s economy grew 4.6% year-over-year in the first quarter of 2026 but contracted 0.3% quarter-over-quarter, highlighting the challenge of navigating moderating growth alongside external-source inflation.
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