This is no time for half-measures in the campaign against price rises. Almost everywhere in Asia the quarter-on-quarter rate of inflation is higher than the year-on-year rate. Whether holding or hiking, no policy statement is complete without a vexed discussion of inflationary forces.

Half-measures, however, were what the Monetary Authority of Singapore served up on Thursday. As it did at its two previous six-monthly policy reviews, MAS tightened by shifting upwards the trading band of the Singapore dollar against an (undisclosed) basket of currencies. The aim is to dampen import prices while trimming the profitability of exporters – feeding over time into lower wages and reduced cost pressures.

Unlike in past episodes, this time MAS has re-centered at a level below the prevailing nominal effective exchange rate. That looks like an artful compromise: acknowledging the need for further tightening – consumer prices increased at least 5 per cent in the first two months of 2011 – while paying heed to its effect on export competitiveness. Few other Asian policymakers have the luxury to give that degree of protection to a vital segment of the economy.

Growth is still too strong for comfort: an 8.5 per cent year-on-year expansion of gross domestic product in the first quarter came after a 12 per cent annual rise in the fourth, when Singapore was easily the world’s fastest-growing developed economy. The fact that the average Singaporean credit card holder now carries seven of them, up from five pre-crisis, is surely worrying. Yet while it is too early to say whether the central bank’s directors have earned their notoriously decent salaries – roughly 50 per cent higher than their US counterparts – one thing seems certain. Using blunt instruments early on has allowed MAS to use precision tools now.

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