Inflation !!!

The MAS bought U.S. dollars after the greenback fell below S$1.4270. The U.S. unit fell to an intra-day low of S$1.4257, the lowest level since June 1997.

In November, Singapore''s inflation rate was at a 25-year high of 4.2% on year. Inflation is likely to be above 5% in the first half of this year due to rise in food prices along with more expensive fuel and housing prices.

The MAS will likely have to accelerate the appreciation of the Singapore dollar. They use the exchange rate, rather than interest rates, to control prices as external trade dwarfs the domestic economy.