Rising Interest Rates in Singapore : Consumers Are Rushing to Borrow
This article originally appeared on ValuePenguinSince the US Fed announced its plans to raise interest rates in December of 2016, interest rates in Singapore have also begun to rise, albeit slowly. For instance, 3-Month Singapore Interbank Offered Rate (SIBOR) has already reached 0.94% in March 2017 after bottoming out around 0.87% in September of 2016. While that may seem small to some people, that’s a relatively meaningful increase of 8%. SIBOR affects almost every interest rate in Singapore, and therefore an increase in SIBOR means greater interest burdens for borrowers. Given that Singapore’s monetary policy is almost solely focused on currency exchange rate stabilisation, further interest hikes expected to come from the US usually means higher rates for Singaporeans too. In anticipation of such at rend, it seems that Singaporean consumers are rushing to finance their big purchases before rates rise further. Below are some of the key trends we observed. Car Loans Are Increasing for the First Time in 8 Years According to our study of household balance sheet in Singapore, car loans have been declining consistently since 2008. After reaching S$17bn in 2008, it nosedived to almost half of its peak to S$9.6bn in 2015. Towards the end [...]
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