S'PORE INTEREST
RATE HIKE UNLIKELY BEFORE SEPT
Jun 19, 2015
Singapore’s financial market, including its mortgage sector,
now has more time to prepare for the anticipated climb in benchmark rates after
the US central bank signalled that the increase is not likely to happen until
September at earliest.
Although this will remove some of the uncertainty felt by
Singapore exporters during the near term, experts believe that Singapore’s
benchmark interest rates may experience some erratic movements before
stabilising towards the end of the year.
Following the US Federal Reserve’s announcement on Thursday
(18 June), the three-month Singapore Interbank Offered Rate (SIBOR) remained
unchanged at 0.82 percent, while the exchange rate of the local currency
against the greenback slightly strengthened at S$1.33 per US dollar.
Moreover, the US central bank’s announcement seems to hint
that there could be two rate hikes in 2015, with the first likely to happen by
September, but said it would adopt a less aggressive stance in raising the
interest rate.
Once the US Federal Reserve makes the concrete announcement
on the interest rate hike, Singapore’s interest rates are expected to follow
suit, noted UOB economist Francis Tan as reported by Channel NewsAsia.
“Initially we are expecting an overshooting of interest
rates being higher at a much quicker pace and then it should come back down
again and moving toward 1.25 percent at the end of this year.”
Info courtesy –
Property Guru
