Holistic interest rate strategy for Singaporean banks
How Singaporean banks can manage interest rates holistically on both sides of the balance sheet
To fight inflation, Singapore’s Monetary Authority (MAS) has tightened its monetary policy five times over the past 18 months. However, on April 14, MAS noted that Singapore’s economy is growing slower than anticipated. Furthermore, based on the latest global developments, the institution anticipates a deeper slowdown for the rest of the year. As the existing tightening measures have yet to take full effect on the economy, MAS did not announce any additional changes.
In light of these tightening measures, banks have achieved outstanding earnings and expanded their loan books despite higher funding costs. Nonetheless, as the economic outlook worsens, balance sheets will be adversely impacted on the deposit and loan sides.
