This means anyone taking personal loans, loans for buying home appliances/furniture etc.
And oh. Credit cards as well. I spoke about it some posts back.
The good thing is the hit would be phased in. The inferred bad thing is, the situation on the ground is not all that rosy. But steps are taken with the relevant help agencies like CCS ever ready.
If you notice the phasing in period ends in July 2019. Perhaps that is MAS' take on when 'peak interest rates' will occur?
The Monetary Authority of Singapore (MAS) has released more information on the Singapore Savings Bond (SSB). I will leave you to click on the link to find out more about the SSB.
But what's the effects of issuing such bonds?
1. Another debt instrument is launched to borrow from the public. This time, aimed specifically at individuals, made easier to procure and with 'safeguards' to assure the retail investor.
2. As suggested by the Business Times article, the SSB would give fixed depos a run for their money. I think it will also grab some share from the ordinary savings accounts, dividend yielding counters on SGX and perhaps even some ETFs. The example cited in the SSB link mentioned a range of 0.9 to 3.3% returns...averaging 2.4%. It should be close.
3. Banks will likely react. Stocks may drop further to increase their yields and attractiveness.
4. Will MAS raise rates sans the Feds? Maybe?
