Singapore June core inflation hits 13-year high

Singapore’s key consumer price gauge rose at its fastest pace in more than 13 years, official data showed on Monday, increasing pressure on the central bank to consider tightening monetary policy again later this year if inflation pressures persist.

The data showed inflation rising across a broad set of categories including services, food, retail and utilities.

The core inflation rate — the central bank’s favoured price measure - rose to 4.4per cent in June on a year-on-year basis. A Reuters poll of economists had forecast a 4.2per cent increase in June. Headline inflation rose to 6.7per cent, compared with economists’ forecast of 6.2per cent.

“Our base case remains for the Monetary Authority of Singapore to tighten its FX policy settings again in October,” said Brian Tan, senior regional economist at Barclays, which also raised its full-year inflation forecast following the data.

The MAS manages monetary policy through exchange rate settings, rather than interest rates, as trade flows dwarf its economy.