Singapore’s broad money supply grew 11.3% on year in September, inching down marginally from the 11.8% expansion logged the month before.
This follows a plunge a 5.4% year-on-year contraction in government deposits in September, which also marks the parameter’s first contraction since June 2019, economists at RHB Singapore’s Research team say in an Oct 30 note.
Similarly, Singapore’s foreign reserves saw the addition of US$0.5 billion ($0.7 billion), bringing the total holding for the month to US$328 billion.
Meanwhile, bank lending growth for local and Asian currency units moderated to -0.2% year-on-year, improving from August’s -0.8% performance.
This was heralded by a -1.8% year-on-year decline in loans to consumers due to lower lending for credit card (-13.5%), cars (-6.9%) and other segments, the RHB team observe.
This is a result of the subdued domestic demand, they explain.
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Conversely, loans to businesses picked up, growing 0.3% thanks to higher disbursements to growth segments such as business services (+12.9%), financial institutions (+9.4%) and building and construction (+7.8%).
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Loans to these segments, particularly the building and construction sector expanded as their projects resumed in the month.
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As for the other segments, “growth remains uneven, as outward-facing economic segments continue to be affected by a slowdown in activities caused by the pandemic,” RHB’s economists say.
Looking ahead, the RHB team expect a 2% contraction in loan growth this year and a slight improvement of -1% in 2021.
RHB Securities Singapore, Monetary Authority of Singapore (MAS), Singapore foreign reserves, Singapore’s bank lending
