SINGAPORE — Singapore’s headline inflation rate fell to 1.4% in October, down from September’s figure of 2%, as the cost of cars dropped and rent prices rose at a slower pace.

The consumer price index rise was also lower than the 1.8% that was expected among economists polled by Reuters. It marked the first time that Singapore’s headline inflation rate fell below 2% since March 2021, when it came in at 1.3%.

Singapore’s core inflation rate, which strips out accommodation and private transport prices, came in at 2.1%, down from 2.8% in September and lower than the 2.5% expected in the Reuters poll.

The Monetary Authority of Singapore said this was due to service inflation slowing, as well as prices of electricity, gas, medicine and clothing rising at a slower pace.

The Singapore dollar was trading at 1.34 against the U.S. dollar after the inflation reading, strengthening by 0.13%.

Unlike many other countries, Singapore does not use benchmark interest rates to set its monetary policy.

Instead, the Monetary Authority of Singapore manages the exchange rate of the Singapore dollar to stabilize the price of goods and services and achieve healthy growth.

Inside an undisclosed policy band, the Singapore dollar fluctuates against the currencies of the country’s trading partners. The MAS is able to adjust the slope, width, and level of the policy band.

On Friday, Singapore reported that its economy expanded 5.4% year on year in the third quarter, faster than the 4.1% official advance estimate released last month.

That marked the city-state’s highest quarterly growth since the fourth quarter in 2021, when it came in at 6.1%, according to data compiled by LSEG.

Singapore also raised its projection of this year’s economic growth to “around 3.5%,” from “2.0 to 3.0%.”

— CNBC’s Anniek Bao contributed to this report.