SOR headache for Singapore banks as rates enter negative territory; MAS defends stance

DBS: one of the banks affected by SOR going negative

Major banks in Singapore issuing mortgages and loans linked to the Singapore dollar swap offer rate (SOR) could see a dip in profits as the SOR rate fell to –0.99% last week.

The outlook also remains negative in the medium term due to the Monetary Authority of Singapore's (MAS) policy to gradually appreciate its currency against a basket of currencies. It uses the SGD nominal effective exchange rate (NEER) to try to kerb inflation while also trying to discourage excessive inflows from US dollars

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