S'pore interest rate rises

S'pore interest rate rises

SINGAPORE (Reuters): Recent rises in prime interest rates by Singapore banks will not hurt the economy significantly, Deputy Prime Minister Lee Hsien Loong told parliament yesterday.

"The MAS (Monetary Authority of Singapore) does not expect the rise in interest rates to affect the economy significantly," he said.

"A one to two percent increase in interest rates will not totally impair profitability."

Singapore's leading banks raised prime interest rates twice in December, lifting them from six to seven percent.

At the end of November, Singapore bank classified loans to regional countries in difficulty amounted to 3.2 percent of total loans to those countries, he said.

Lee also said total classified loans amounted to two percent of the global assets of Singapore banks.

Total investments by the six major Singapore banks in Southeast Asia's crisis-hit countries were Singapore $41 billion, Lee said.

He said they had S$28 billion invested in Malaysia, S$4.1 billion in Thailand, S$5.5 billion in Indonesia, $S2.7 billion in South Korea and S$700 million in the Philippines.