Expect more yuan slides, so interest rate go up Right.

[Arcachon]

China's economic managers, generally known for their sagacity, have been signalling panic lately. Yesterday's shock move to devalue the yuan has that element.

The central bank called the devaluation a one-off move but the worry points are growing.

For a while it's been clear that China has been dipping into its vast forex reserves to shore up the currency. One analysis suggested that the People's Bank of China (PBOC) depleted US$299 billion (S$414 billion) of reserves in the year through June. Beijing sought a steady yuan partly because of its quest for reserve-currency status with the International Monetary Fund.

Trade numbers over the weekend suggest an export slowdown, adding to worries that the world's No. 2 economy is buffeted by headwinds at home. On June 28, the PBOC cut benchmark interest rates to a record low. Four rate cuts since November suggest the struggle to meet the 7 per cent growth target for 2015. Indeed, many think the economy is in worse shape; unsold homes in China, for instance, outnumber those in the US before the sub-prime crisis. Mr Ruchir Sharma, emerging markets head at Morgan Stanley, recently predicted that the next global recession "would be made by China".

More telling perhaps is capital flight, evidenced in myriad ways, including snap purchases of expensive real estate abroad by Chinese investors. Last month, Goldman Sachs researchers estimated that US$224 billion flowed out of China in the second quarter, levels "beyond anything seen historically". At the time, China's foreign exchange watchdog insisted that there had been "no large and continued capital flight so far". Not many are convinced. Some calculate that capital outflows may have hit US$800 billion over the past year.

During the Asian financial crisis, China's decision to not indulge in competitive devaluation was a major factor in helping East Asian economies recover. Today, it seems to have judged that it has to think of itself first. Expect more yuan slides.

http://www.straitstimes.com/business...es#xtor=CS1-10

[Arcachon]

China interest rate down, Yuan down.

Japan interest rate down, Yen down.

SG interest rate up ?????

[Forest ang]

so funny

[Kelonguni]

China interest rate down, Yuan down.

Japan interest rate down, Yen down.

SG interest rate up ?????

This I asked before. With the China slowdown and problems in Europe, how would US just increase rates at whim? Even if it does, why can't we borrow from China? A lot of China banks are aggressive in lowering interests for SG loans.

The current situation greatly resembles 2008 2009 times, almost dejavu. A sharp downturn, followed by huge inflationary pressures.

[Arcachon]

If my guess is not wrong, all the central Bank already talk to one another.

They are just singing song at different time.

You print, I print, everyone print.

[minority]

China interest rate down, Yuan down.

Japan interest rate down, Yen down.

SG interest rate up ?????

Coz they QE. and SGP int already very low. and we manage our inflation with a basket or currency.

[minority]

This I asked before. With the China slowdown and problems in Europe, how would US just increase rates at whim? Even if it does, why can't we borrow from China? A lot of China banks are aggressive in lowering interests for SG loans.

The current situation greatly resembles 2008 2009 times, almost dejavu. A sharp downturn, followed by huge inflationary pressures.

Coz china have capital outflow control. They currency is not freely traded

[Kelonguni]

Coz china have capital outflow control. They currency is not freely traded

The inability to trade the currency is accepted. But I am curious what CIMB mortgage loans are based on, as I have a friend who got a package from them. If an SG mortgagee loans from a Chinese bank to finance a loan, where does the money come from? CIMB borrows from local bank (SGD) or they come up with it themselves by exchanging Yuan with SGD? Or like Arcachon says, they just prepare a paper document?

[Arcachon]

Coz they QE. and SGP int already very low. and we manage our inflation with a basket or currency.

Question ? Do Singapore also QE when the M3 money supply increase over the year.

[Arcachon]

The inability to trade the currency is accepted. But I am curious what CIMB mortgage loans are based on, as I have a friend who got a package from them. If an SG mortgagee loans from a Chinese bank to finance a loan, where does the money come from? CIMB borrows from local bank (SGD) or they come up with it themselves by exchanging Yuan with SGD? Or like Arcachon says, they just prepare a paper document?

https://en.wikipedia.org/wiki/Basel_II

Bank need to be Basel II.

Lehman Brothers is not a Bank

[Arcachon]

Don't know like that can call print money or not.

[proud owner]

The inability to trade the currency is accepted. But I am curious what CIMB mortgage loans are based on, as I have a friend who got a package from them. If an SG mortgagee loans from a Chinese bank to finance a loan, where does the money come from? CIMB borrows from local bank (SGD) or they come up with it themselves by exchanging Yuan with SGD? Or like Arcachon says, they just prepare a paper document?

when a foreign bank set up a branch here ... head office must inject funds ... working capital, etc etc ...
these can be in USD or home currency ...

Head office would do an fx and place this SGD in the SG branch,,,

thats how it get started ... the SG branch can then borrrow more from local banks when business picks up ..

[Kelonguni]

when a foreign bank set up a branch here ... head office must inject funds ... working capital, etc etc ...
these can be in USD or home currency ...

Head office would do an fx and place this SGD in the SG branch,,,

thats how it get started ... the SG branch can then borrrow more from local banks when business picks up ..

Thanks for clarifying. It means we have capital put there they have capital put here. Hope money supply stays steady for a while.

[proud owner]

Thanks for clarifying. It means we have capital put there they have capital put here. Hope money supply stays steady for a while.

but this working capital CANNOT be touched ...

assuming at the end of fiscal year, the SG branch made S$XXX mil.

SG branch would then convert these SGD profit back to home currency and repatriated, keeping only the working capital.

[newbie11]

The inability to trade the currency is accepted. But I am curious what CIMB mortgage loans are based on, as I have a friend who got a package from them. If an SG mortgagee loans from a Chinese bank to finance a loan, where does the money come from? CIMB borrows from local bank (SGD) or they come up with it themselves by exchanging Yuan with SGD? Or like Arcachon says, they just prepare a paper document?

Wait and see the rate

[Arcachon]

[Arcachon]

[Citizen]

Since all big and power countries are printing money, after all printing are not really that bad except rich getting richer if they dare to invest.
Poor their local Govt will look after. Only those middle class kiasi getting more resentful.

[Kelonguni]

Since all big and power countries are printing money, after all printing are not really that bad except rich getting richer if they dare to invest.
Poor their local Govt will look after. Only those middle class is getting more resentful.

It's a profound observation that I think is very accurately portraying what is happening.

That's why the CMs must stay. The prices of the most expensive houses or housing types must not be allowed to run away.

There is however, a very little chance of a significant rise in interest rates in the long run. At max, is 0.25 or 0.5% symbolic rise over the next few years. My guess only.

[indomie]

China will not tolerate low growth. IMF refusal for Yuan's Special Drawing Right...... Refocus China on domestic economy. When considering between status or stomach, stomach often win.

[pmet]

SINGAPORE: A key interest rate benchmark hit a four-month high on Thursday (Aug 13), as sentiment towards the Singapore dollar remain weak following the depreciation of the Chinese Yuan.

On Wednesday, the three-month Singapore Interbank Offered Rate (SIBOR) rose to 0.9345 per cent. On Thursday, the rate climbed further to 0.9388 per cent.

Property analysts said banks have not yet adjusted mortgage rates that are pegged to SIBOR, which are currently hovering around 1.5 to 1.7 per cent. The rate is expected to rise to 2 per cent by the end of this year.

The vacancy rate for residential properties is also expected to climb, following the tightening of the labour market and slowing down of the economy. Experts said some owners may be forced to sell their properties due to difficulties servicing their loans.

http://www.channelnewsasia.com/news/...r/2048930.html



If SGD continues to weaken with the yuan, more INT rates hike to come next year! If SGD strengthen against the yuan, GG to our export, technical recession to follow. This is what I call loose-loose situation. Problem lies in the way we set (or don't set) interest rates. The housing bubble was also the result of this.

[minority]

with TDSR some of the rate hike risk is lowered. which is worst recession or rate hike? as long have job can still service the loan. the ones tat get in trouble are those that over leverage.

[Kelonguni]

Interesting movements. 0.0043% rise. For the full rate to reach 2, the rise needs to occur maybe 100 times. Seems likely but improbable.

How I wish I had studied economics more carefully. The link between interest rate and global economy. Something complex is happening here between US and China, and we are caught right smack in the middle.

SINGAPORE: A key interest rate benchmark hit a four-month high on Thursday (Aug 13), as sentiment towards the Singapore dollar remain weak following the depreciation of the Chinese Yuan.

On Wednesday, the three-month Singapore Interbank Offered Rate (SIBOR) rose to 0.9345 per cent. On Thursday, the rate climbed further to 0.9388 per cent.

Property analysts said banks have not yet adjusted mortgage rates that are pegged to SIBOR, which are currently hovering around 1.5 to 1.7 per cent. The rate is expected to rise to 2 per cent by the end of this year.

The vacancy rate for residential properties is also expected to climb, following the tightening of the labour market and slowing down of the economy. Experts said some owners may be forced to sell their properties due to difficulties servicing their loans.

http://www.channelnewsasia.com/news/...r/2048930.html



If SGD continues to weaken with the yuan, more INT rates hike to come next year! If SGD strengthen against the yuan, GG to our export, technical recession to follow. This is what I call loose-loose situation. Problem lies in the way we set (or don't set) interest rates. The housing bubble was also the result of this.

[Citizen]

The world economy is control by Elites(IMF, FED, ECB, PBOC and the Gangs) and Govts. The problems they are facing now are peace and balance. The rests are secondary.

[Citizen]

Interesting movements. 0.0043% rise. For the full rate to reach 2, the rise needs to occur maybe 100 times. Seems likely but improbable.

How I wish I had studied economics more carefully. The link between interest rate and global economy. Something complex is happening here between US and China, and we are caught right smack in the middle.

I remembered in 2008-2009 our property price drop a lot due to USA , so now our property price dropping also due to USA recovered therefore they going to hike rate. Confused confused
thus never invest in property. it is a zero sum game.

[Citizen]

I remembered in 2008-2009 our property price drop a lot due to USA , so now our property price dropping also due to USA recovered therefore they going to hike rate. Confused confused
thus never invest in property. it is a zero sum game.

All the masters if not when then is the right time and right price to invest ? Masters please dun tell me history and theory. Thanks all masters

[Citizen]

SINGAPORE: A key interest rate benchmark hit a four-month high on Thursday (Aug 13), as sentiment towards the Singapore dollar remain weak following the depreciation of the Chinese Yuan.

On Wednesday, the three-month Singapore Interbank Offered Rate (SIBOR) rose to 0.9345 per cent. On Thursday, the rate climbed further to 0.9388 per cent.

Property analysts said banks have not yet adjusted mortgage rates that are pegged to SIBOR, which are currently hovering around 1.5 to 1.7 per cent. The rate is expected to rise to 2 per cent by the end of this year.

The vacancy rate for residential properties is also expected to climb, following the tightening of the labour market and slowing down of the economy. Experts said some owners may be forced to sell their properties due to difficulties servicing their loans.

http://www.channelnewsasia.com/news/...r/2048930.html



If SGD continues to weaken with the yuan, more INT rates hike to come next year! If SGD strengthen against the yuan, GG to our export, technical recession to follow. This is what I call loose-loose situation. Problem lies in the way we set (or don't set) interest rates. The housing bubble was also the result of this.

Tightened and loosen also die. When rate was low, the excuse for not investing because the rate is going up. When rate is up, the excuse is the cost of borrowing is high. So how? Don't invest? Master please enlighten Thanks

[Kelonguni]

Don't call people master lah.

The Web is intricately linked and complex. It's not as simple as purely interest rates determining prices. The rise from 2009 till 2013 can be attributed to hot money emerging from China and Asia countries. This money has redistributed worldwide since the cooling measures by HK and SG .

Now that we have a new equilibrium point, US wants to raise interest rate, and this coincides with Yuan devaluation. To me, devaluation feels like a negative interest rate from China - cheaper goods and properties from China.

The devaluation of Yuan and partial devaluation for SGD allow for interest rates to be adjusted upwards to an extent. But it does not mean things will get cheaper. For example, if interest rates go up in SG, it means financing costs will go up but this could also be linked to high inflation as well which in part caused property prices to spike from 2009 to 2013.

[teddybear]

When rate is low, it is time to invest in properties.

However, now properties prices in Singapore is dying a slow death is because of the property cooling measures, not because of the low rate now..........

Wait till you see Singapore GDP going down the drain with growth <4%, rate increases, capital outflows (you will see S$ keep dropping against US$ and other currencies), singapore property prices will suffer much more!

Tightened and loosen also die. When rate was low, the excuse for not investing because the rate is going up. When rate is up, the excuse is the cost of borrowing is high. So how? Don't invest? Master please enlighten Thanks

[Citizen]

Don't call people master lah.

The Web is intricately linked and complex. It's not as simple as purely interest rates determining prices. The rise from 2009 till 2013 can be attributed to hot money emerging from China and Asia countries. This money has redistributed worldwide since the cooling measures by HK and SG .

Now that we have a new equilibrium point, US wants to raise interest rate, and this coincides with Yuan devaluation. To me, devaluation feels like a negative interest rate from China - cheaper goods and properties from China.

The devaluation of Yuan and partial devaluation for SGD allow for interest rates to be adjusted upwards to an extent. But it does not mean things will get cheaper. For example, if interest rates go up in SG, it means financing costs will go up but this could also be linked to high inflation as well which in part caused property prices to spike from 2009 to 2013.

Calling people Master is a respect, I believe there are knowledge that people have that I might not have. In China we even call the taxi driver shifu.
Btw thanks for your reply.