The Monetary Authority of Singapore also said in its annual report that inflation in the city-state is likely to be contained this year as Singapore's open economy benefits from global competitiveness and as energy prices are not expected to rise sharply.

Annual profit was S$3.85 billion (US$2.55 billion; €1.85 billion), compared with S$1.22 billion (US$807 million; €584 million) in the previous year, the central bank said.

Total assets, including holdings in its currency fund, grew by S$12.29 billion (US$8.15 billion; €5.9 billion) to S$218.21 billion (US$144.7 billion; €104.8 billion).

The bank's total expenditure rose to S$1.34 billion (US$889 million; €643 million) because of higher investment and interest expenses, it said.

The central bank reiterated its forecast for consumer price inflation between 0.5-1.5 percent, compared with last year's 1.0 percent rate. Energy costs will have less of an impact on inflation in 2007 as average oil prices are not expected to rise sharply from last year, it said.

Singapore's economy in the second quarter grew at its fastest pace in two years, boosted by expansion across several sectors. Gross domestic production expanded 12.8 percent compared to the first quarter on a seasonally adjusted, annualized basis. The economy expanded 7.9 percent in 2006.

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