<div id="readability-page-1"><div> By Megan Cheah <pre></pre> SINGAPORE--Singapore's central bank tightened monetary policy settings for the first time in over three years as it braces for the economic fallout from the war in the Middle East. Policymakers in the city-state are walking a tightrope being trod by central banks the world over: act now to cap inflation at the risk of curbing growth, or wait and risk falling behind the curve. Most other central banks in Asia have held steady for now, but the Monetary Authority of Singapore opted to move sooner rather than later, ending a pause stretching back to July 2025--a year during which it loosened policy settings twice to prop up growth against tariffs risks. It joins Australia as the only central bank in the region to have tightened so far since the U.S.-Israel war with Iran broke out. The MAS's decision was expected by most analysts polled by The Wall Street Journal, as the conflict disrupts critical supply routes, driving up prices of oil and other commodities the small, open economy relies on. That echoes some of the conditions seen after Russia's invasion of Ukraine in 2022, which was the last time the MAS tightened. Like its peers elsewhere, the MAS expressed alarm over the widening impact of the Middle East war, which disproportionately affects Asia's largely energy-importing economies. It painted a grim picture of the risks ahead. Singapore's economic growth will slow over the course of this year, and inflation will rise more than initially anticipated, the central bank said. Already, the city-state's imported energy costs are up as hostilities choke off the Strait of Hormuz--a supply route through which Asia gets a significant amount of its power needs and other critical commodities like fertilizers. Hopes that progress was being made on restoring flows via the strait dimmed when the U.S.-Iran peace talks collapsed over the weekend, and President Trump ordered a naval blockade. However, talks are ongoing. On Tuesday, the MAS warned that prices of a wider range of imported goods and services are set to increase in the quarters ahead. As more input costs climb, profitability in more sectors will be squeezed, and shortages could curtail industrial production. &#34;Even if supplies from the Middle East are restored, global energy prices are likely to remain elevated for some time,&#34; it said. Advance estimates showed that Singapore's economy is already feeling the strain, with first-quarter growth slowing on the year. On a seasonally-adjusted quarterly basis, the economy contracted--its weakest results in nearly five years. Purchasing managers survey data has indicated building pressure on the financial hub's manufacturers, and the government has warned consumers and businesses to prepare for a lasting economic hit even if a resolution is reached soon. Officials have announced a US$778 million package to help companies and households deal with the pressure. The central bank now expects core and headline inflation to reach 1.5% to 2.5% this year, up from the 1.0% to 2.0% predicted previously. Consequently, policymakers will slightly increase the rate of appreciation of the Singapore dollar nominal effective exchange rate policy band. No changes will be made to the width and level at which the band is centered. Instead of lowering or raising interest rates, the MAS uses currency as a policy tool to reduce inflationary expectations and boost growth as trade flows dwarf the island nation's domestic activity. Despite the considerable uncertainty, the central bank said it is well-placed to respond effectively to any risk to medium-term price stability. &#34;[The] MAS also stands ready to curb excessive volatility&#34; in the policy band, it said. <pre></pre> --Fabiana Negrin Ochoa contributed to this report <pre></pre> Write to Megan Cheah at megan.cheah@wsj.com <pre></pre> (END) Dow Jones Newswires April 13, 2026 22:16 ET (02:16 GMT)Copyright (c) 2026 Dow Jones &amp; Company, Inc.</div></div>

Singapore's central bank has tightened monetary policy for the first time in over three years, responding to economic challenges from the Middle East conflict. The Monetary Authority of Singapore (MAS) aims to curb inflation while managing growth risks, joining Australia as one of the few central banks in the region to act. The MAS anticipates slower economic growth and rising inflation, adjusting its inflation forecast to 1.5% to 2.5%. A US$778 million support package has been announced to assist businesses and households amid increasing costs and potential production shortages.

- Singapore's central bank has tightened monetary policy for the first time in over three years in response to economic pressures from the ongoing war in the Middle East.  
- This decision, prompted by rising energy costs and inflation, comes as the central bank anticipates a slowdown in economic growth and higher inflation rates than previously expected.  
- The Monetary Authority of Singapore is adjusting its currency policy to curb inflationary expectations while preparing for potential future shocks to price stability.

MorningStar

Singapore Central Bank Tightens Policy as It Braces for Slower Growth, Higher Prices — Update