By Mr. Propwise
Many people are concerned that the current low interest rate environment in Singapore could end by the end of this year, driving up the cost of mortgages and putting pressure on the property market. In this article we take a look at how interest rates in Singapore are determined, and where they are likely to head for the rest of the year and beyond.
How are interest rates determined?
In a 1999 paper titled “Interbank Interest Rate Determination in Singapore and its Linkages to Deposit and Prime Rates”, staff of the Monetary Authority of Singapore (MAS), the central bank, found that “only changes in US interest rates or market expectations of future movements in the exchange rate have a significant impact on the domestic interbank rate.”
But other analysts have found that the SIBOR has historically been positively correlated to the movement of the bank loan ...
...