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S’pore vulnerable to rise in US interest rates: Deutsche Bank

Singapore's highly leveraged household and banking sector will face some difficulties when US interest rates go up, according to a study by Deutsche Bank, which covers 10 economies in Asia ex-Japan.

SINGAPORE: Singapore's highly leveraged household and banking sector will face some difficulties when US interest rates go up, according to a study by Deutsche Bank, which covers 10 economies in Asia ex-Japan.

The US Federal Reserve is expected to tighten its monetary policy this year, and there are concerns that some Asian economies will struggle to adjust to the change.

As financial centres, Singapore and Hong Kong are seen as vulnerable due to high leverage and credit growth.

But Deutsche Bank said Singapore's government can be expected to step in if necessary.

Taimur Baig, Deutsche Bank’s chief economist, said: "Thailand has gone through so many stress tests in recent years, both political as well as in natural disasters.

“I think investors have some degree of respect with respect to the resilience of its economy – to take the shock and to bounce back from the shock -- and Thailand has demonstrated that repeatedly." 

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