Consumer prices in Singapore fell for the 18th straight month in April but the intensity has eased and the reading has moved off a 30-year low, helping the Singdollar gain mildly on Monday.
The headline consumer price inflation fell 0.5% in the first month of the second quarter as private road transport costs continued to fall as per the official data released on Monday (23 May).
Analysts had been expecting 0.7% decline in the CPI index thus proving the April number a slightly hawkish surprise. Comparing to the 1% fall recorded in March, the first month of the second quarter shows that prices are beginning to stabilise in the island economy.
The Singapore dollar strengthened to 1.3771/USD from Friday's close of 1.3817 following the data. Against the Hong Kong dollar, the Singapore currency gained to 5.6394 from 5.6224.
CPI data of Singapore is jointly released by the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI).
The 18-month stretch of decline is the longest deflation series since 1977 in the City.
The core inflation measure that effectively gauge daily expenses inched up to 0.8% for April from the March reading of 0.6%.
Details showed that higher services inflation as well as a smaller decline in electricity tariffs helped the core inflation rate continue to accelerate.
The MAS said core inflation is expected to pick up gradually over the course of the year, partly because oil prices are expected to be slightly higher in the second half of the year compared with the first half.
Singapore's policymakers expect the disinflationary effects of Budget measures and other one-off programmes to ease as time goes by.
Such measures include medical subsidies under the Pioneer Generation Package, the reduction in the concessionary foreign domestic worker levy, as well as the abolition of national examination fees for Singaporeans implemented last year.