FD rates have already started tapering off in April.
The fixed deposit (FD) rates of banks in Singapore is expected to continue moderating in the coming months in a sign that funding pressures may have already peaked, according to a report from CIMB.
FD rates have grown from around c.1.4% in January 2018 to c.1.9% in December 2018 although most of the higher FD rates in the market came from foreign banks which had the push of fulfilling required net stable funding ratios.
"[T]hese promotions were largely offered by foreign banks in Singapore, which had much smaller deposit franchises here compared to the listed Singapore bank," analyst Andrea Choong said in a report.
FD rates have already started to ease in April which bodes well for banks who can expect milder increase in funding costs in a move that is expected to help boost net interest margins.
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