Amid growth concerns worldwide and a looming transition back to normal interest rates in the U.S., the boss of Singapore’s Oversea-Chinese Banking (OCBC) is cautious of the credit environment ahead.
“Over the past two to four years, the credit environment has been so good that it is almost abnormal. So as we go back to a more normal credit environment, it is going to be tougher than last year,” group CEO Samuel Tsien told CNBC’s “Managing Asia.”
A recovery in the world’s largest economy is paving the way for a lift-off in U.S. interest rates, which many analysts expect to take place in September. With the three-month Singapore interbank offered rate, or SIBOR, closely linked to the U.S. Federal funds rate, that liftoff will likely pull the city-state’s lending rates higher as well. The Sibor hit a 6-year high of above 1 percent in March and was at 0.8788 per cent on Thursday.