No imported inflation, no asset inflation in Singapore

There is no imported inflation in Singapore. The off-scheduled decision to flatten the slope of the SGD policy band on 28 Jan was attributed to the sharp plunge in global oil prices that pushed Singapore's import price index well below the lows seen in previous cycles. 

Despite this, the MAS did not further ease the SGD policy at the policy review on 14 Apr in anticipation of a recovery in oil prices in the latter half of the year. West Texas Intermediate (WTI) oil prices initially bottomed at $42/barrel on 18 Mar and recovered to $60, a level it fluctuated around in May-June. Since then, oil prices have fallen back and remain near previous lows. 

Asset inflation is also non-existent. Property prices, as measured by the URA residential property price index, have fallen 6.7% in 2Q15 from their 3Q13 peak. The STI has fallen more than 20% from its mid-April peak. As at end-Sep, Singapore was the second worst performing market in Asia ex-Japan this year. Homeowners and equity investors feel poorer this year in spite of falling prices.