Imported inflation
Definition. Imported inflation is a rise in the general price level caused by an increase in the prices of imported goods and services, including raw materials and intermediate inputs. For a small and open economy that relies heavily on imports, higher world prices or a weaker currency feed directly into domestic costs and prices.
Singapore manages imported inflation partly through its exchange rate policy, since a stronger currency lowers the domestic price of imports and helps to contain cost push pressures.
This term belongs to Singapore's Monetary Policy (MAS) in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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