Cash searching for a better yield

PHOTO: Cash searching for a better yield

SINGAPORE - One aspect worth thinking about in last Sunday's commentary ("HDB coffee shops are not District 10 bungalows") is the cumulative effect of a long-term policy of interest- and exchange-rate suppression in Singapore.

This boosts capital investment and economic growth, but at the expense of excess money supply and asset bubbles.

The high cost of property is in part a reflection of too much cash searching for a yield better than the negligible rates available on bank deposits or bonds.

Roger Hancock


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