Money is leaving Singapore

Financial Business - Securities

Monday, May 1, 2023 14:00 (GMT+7)
14:00 5/1/2023

After receiving billions of SGD in deposits last month, commercial banks in Singapore have been hit with a cash outflow.

According to Bloomberg news site, last month - the time when a series of banks in the US collapsed and raised the risk of spreading the crisis globally, banks in Singapore received a lot of deposits from foreigners.

However, in April, total foreign deposits here dropped sharply to SGD 521.8 billion from SGD 544 billion - equivalent to a decrease of SGD 22.2 billion. According to data from the Monetary Authority of Singapore, this is the lowest level of foreign deposits since July 2022.

SGD 22.2 billion of foreign deposits in Singapore were withdrawn in April 2023. Photo: Nikkei Asia .

Not only foreign deposits, total outstanding loans and advances of commercial banks in Singapore also decreased by SGD 7 billion last month, down to USD 796.87 billion and reaching the lowest level since August 2021.

According to many experts, the reason for the sharp decrease in total outstanding debt is that the Central Bank of Singapore has tightened monetary policy for the fifth consecutive time, and announced that it has no intention of reducing interest rates in the near future.

In addition, earlier this week, the Monetary Authority of Singapore also warned that "the outlook for the domestic financial sector is gradually weakening due to the impact of the unstable context from the US banking industry".

According to the agency's report, Singapore's economic growth momentum in 2023 will continue to decline due to a slowing global economic outlook, accompanied by persistent inflation, price volatility and restrictive financial conditions.

In addition, in a report on the labor situation in the first quarter of 2023, Singapore's unemployment rate fell to 1.8% - the lowest level in the past 8 years. Meanwhile, the rate of layoffs here increased for 3 consecutive quarters.

Explaining these two opposing trends, Singapore's Ministry of Manpower said that job growth in the coming time is likely to decline and remain uneven across industries, as global economic difficulties will create different human resource needs.

In 2023, the world economy is forecast to continue to fluctuate and cannot recover quickly. Many major economies still face risks such as slow GDP growth, inflation, unemployment, bad debt, etc. Zing readers are invited to read the 2023 Economic Bookshelf to grasp new economic knowledge and information in 2023.

Chang'e

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