Low Low Rates in Singapore

Against the backdrop of rising yield in the United States and in Europe, it is interesting to see that Singapore rates remain low and sticky. Check out the short term rates here. The longer end of the yield curve is also relatively low in comparison to US and Europe.
Well the MAS has categorically stated that Singapore uses the exchange rate as its only tool to maintain price stability, rather than using interest rates.

So, in this low interest rate environment, we see the following implications/consequences:

• Buoyant property markets - Loans are cheap, banks are willing to extend their loans
• Capital gains for the local banks - Local banks borrow cheaply from retail customers paying less than 0.5% on deposits but lend out at 6%
  
• Weak Singapore dollar against the Euro, Sterling and Australian, NZ dollar. Companies exporting to these countries can expect an exchange rate windfall

Is MAS going to raise rates anytime soon? I do not think so. Singapore prices, with the exception of the property markets, have remained relatively stable so far. In addition, in order to compete with the cheap (and good?) workforce in Asia, the Singapore dollar has to remain competitive.
So what to do with the extra cash? Well the simplest way would be to open a foreign currency Fixed Deposit - taking on a bit of the FX risk but getting a lot better returns.