The data caused a jump in the three-month swap-offer rate, one of the nation’s benchmark interest rates that reflects the cost of borrowing in Singapore dollars. The gauge rose for four days after the GDP data even as borrowing costs in the rest of the world fell. The rate had previously surged in January 2015 when the MAS eased policy, and again in April 2016 when it stopped seeking currency appreciation.
(July 22): A rapid deterioration in Singapore’s economic data has fuelled speculation the central bank will ease monetary policy. The result may be higher interest rates and bond yields.
Bets the Monetary Authority of Singapore will adjust policy have intensified after government reports over the past month showed the economy unexpectedly shrank 3.4% in the second quarter and exports slumped 17.3% in June. The trade-reliant economy has suffered amid escalating tensions between the US and China.
