Singapore on Friday surprised financial market by saying it will tighten monetary policy slightly because of persistent inflationary pressures, sparking a rally in the local dollar.
Unlike most countries which target interest rates, Singapore manages monetary policy by letting its dollar rise or fall in a undisclosed band against a secret trade-weighted basket of currencies of its main trading partners.
MAS' decision to let the local dollar rise at a slightly faster pace, albeit within a narrower policy band, pushed the Singapore dollar higher against its U.S. counterpart. Full story
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