(14 January 2016 – Singapore) As China’s economic volatility persists, Singapore’s key interest rates continue to rise to levels not seen since the 2008 global financial crisis.
The three-month swap offer rate (SOR), mainly used to price commercial loans, rose to 1.75581 percent. It was 1.70064 percent on December 31.
Uncertainty on how closely Singapore's economy is intertwined with China is weighing on the Singapore dollar (SGD) and putting pressure on the SOR.
It means the SGD, which has lost 1.8 percent since the beginning of 2016, is expected to continue to weaken and interest rates will rise to compensate for holding on to a falling SGD.
China, the world’s second largest economy is Singapore's largest trading partner; Singapore became China's largest overseas direct investment destination in Asean in 2014.