On Monday, July 27, 2026, Singapore tightened its monetary policy for the second time in three months as global energy market volatility and inflation risks remain high due to the ongoing conflict involving the US and Iran.

The Monetary Authority of Singapore (MAS) announced it would increase the rate of appreciation of the Singapore dollar’s trade-weighted value. This move aims to counter rising import costs, as Singapore relies heavily on imports for food and energy. Elevated oil prices, driven by tensions in the Middle East following US-Israel attacks on Iran that began on February 28, continue to impact the global economy.

Unlike many central banks that adjust interest rates, MAS manages inflation by controlling the Singapore dollar's value against a basket of currencies from its main trading partners within an undisclosed band. A stronger Singapore dollar helps mitigate the effects of rising global prices on local living costs.

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