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Singapore : Sources of Inflation, Exchange rates

3.29.3 Sources of inflation 2011 2012 Housing Transport Food Education! Recreation and othersi Health carei Clothing and footwear Communications -0.5 0.0 0.5 1.0 1.5 2.0 2.5 Percentage points Source: Ministry of Trade and Industry. 2012. Economic Survey of Singapore. www.mti.gov.sg 3.29.4 Exchange rates Nominal effective Real effective S$I$ Index, Jan 2011= 100 S$/$ 110_ _1.16 105_ -1.20 100_ _1.24 95_ _1.28 90 _1.32 Jan Jul Jan Jul Jan 2011 2012 2013 Sources: Bureau of International Settlements; CEIC Data Company (accessed 6 March 2013). 3.29.3 Sources of inflation 2011 2012 Housing Transport Food Education! Recreation and othersi Health carei Clothing and footwear Communications -0.5 0.0 0.5 1.0 1.5 2.0 2.5 Percentage points Source: Ministry of Trade and Industry. 2012. Economic Survey of Singapore. www.mti.gov.sg 3.29.4 Exchange rates Nominal effective Real effective S$I$ Index, Jan 2011= 100 S$/$ 110_ _1.16 105_ -1.20 100_ _1.24 95_ _1.28 90 _1.32 Jan Jul Jan Jul Jan 2011 2012 2013 Sources: Bureau of International Settlements; CEIC Data Company (accessed 6 March 2013).

Singapore : Sources of Inflation, Exchange rates

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Inflation remained elevated but moderated somewhat to 4.6% in 2012 from 5.2% in 2011. The largest contributors to inflation in 2012 were housing and transportation, the latter driven by rising prices ... for vehicle quota premiums (Figure 3.29.3). Food price hikes eased as world prices declined and the Singapore dollar appreciated. Core inflation, which excludes the costs of housing and private road transport, averaged 2.6% in 2012, up from 2.2% in 2011. Given Singapore’s open capital account and its use of an undisclosed exchange rate band to execute monetary policy, interest rate and money supply developments are largely outside the control of the Monetary Authority of Singapore. To contain inflationary pressures, the authority has maintained since April 2010 a tightening bias, leading to an appreciation of the nominal effective exchange rate by 5.9% in 2012, compared with 0.2% in 2011 (Figure 3.29.4). Interest rates remain lower than those in the US (Figure 3.29.5). Money supply growth moderated to 7.2% from 10% the previous year as economic activity slowed. Credit expansion decelerated, with credit to the private sector expanding by 17% in 2012, down from 30% in 2011. Fiscal and macroprudential measures were tightened in 2012 to complement the central bank’s contractionary stance and discourage speculation in the property market. Stamp duty tax on property purchases were raised from 10% to 15% for foreigners, and introduced at 5% for permanent residents; the loan-to-value ratio for mortgages was lowered from 60% to 50% for a second property. Source: Ministry of Trade and Industry. 2012. Economic Survey of Singapore . www.mti.gov.sg , Bureau of International Settlements; CEIC Data Company (accessed 6 March 2013)

Singapore : Sources of Inflation, Exchange rates

Singapore : Sources of Inflation, Exchange rates

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