No large inflow of deposits from Hong Kong, says Singapore central bank

SINGAPORE: The Monetary Authority of Singapore (MAS) said that media reports suggesting that there had been a large flow of deposits from Hong Kong to Singapore were incorrect.

While foreign currency deposits in Singapore have grown substantially since the beginning of this year, the amount is much less than what had been cited in some media reports, the central bank said in a statement on Sunday.

“Total foreign currency non-bank deposits in Singapore’s banking system stood at S$781 billion (RM2.4 trillion) at the end of April this year, 20% higher than a year ago,” it revealed.

Media reports that said foreign currency deposits at Singapore’s banks had jumped almost four-fold on a year-on-year basis in April 2020 appeared to have only focused on deposits in the Domestic Banking Units (DBU), ignoring the Asian Currency Units (ACU), it said.

“It is not meaningful to look at only the foreign currency deposits in the DBUs as they make up less than 5% of the total of such deposits across both the DBUs and ACUs,” it said.

MAS stressed that the strong growth in foreign currency deposits in Singapore this year was driven by deposits from various sources – domestic, regional, and beyond the region, for various reasons.

“No single region or country source dominates,” it said.

MAS added that there had been some well-known global drivers of this deposit growth amid the current Covid-19-related economic slump, including central bank actions to increase liquidity in the financial system, banks and corporate treasuries raising their liquidity profiles, and a higher level of precautionary savings by households.

“Other financial centres have also seen significant deposit growth,” it said. – Bernama

source https://www.thesundaily.my/business/no-large-inflow-of-deposits-from-hong-kong-says-singapore-central-bank-EB2542341