Analysts see rising risk of off-cycle central bank tightening as Singapore core inflation climbs

THE Monetary Authority of Singapore (MAS) is expected to tighten policy settings at its half-yearly review in October – but may now be pushed to do so even earlier, analysts have said.

The latest warning came as consumer prices in Singapore continued their upwards creep in May. Headline inflation rose to 5.6 per cent, against 5.4 per cent in April, while core inflation – used to guide policy for the MAS – increased to 3.6 per cent, from 3.3 per cent before.

The outlook “suggests room for further monetary policy tightening on the horizon, probably sooner rather than later, especially since the major central banks are fixated on frontloading their rate hikes”, OCBC chief economist Selena Ling said in a note on Thursday (Jun 23).