How Does the Russia-Ukraine War Affect Your Finances in Singapore?

How does the Russia-Ukraine war affect prices in Singapore? What can we do to better manage its impact on us? Read this article to find out.
ukraine flag

On 1 March 2022, Singapore’s Foreign Affairs Minister announced that Singapore will be imposing sanctions on Russia in response to its invasion of Ukraine. These include restricting the export of items that can be directly used in the conflict and the blocking of some bank and financial transactions associated with Russia.

As the Russia-Ukraine conflict grows in intensity, here is how it could affect your finances in Singapore.

What Prices in Singapore Are Rising Due to the War?

”agriculture”

Food

Food prices in Singapore are likely to rise even more than they already have. In January, the Department of Statistics Singapore reported that food prices in Singapore, for both non-cooked food and served food, had already risen by 2.2% from the previous year and 0.8% from the previous month1.

According to an article on Time.com2, Ukraine and Russia together are responsible for more than 25% of global trade in wheat and around 20% of the global sales of corn. The conflict is likely to disrupt this supply of food to Singapore, furthering worsening the country’s food inflation.

Oil, Petrol and Diesel

Oil prices in Singapore are also going up. Pump prices in Singapore were already rising3 by as much as 11 cents per litre due to an increase in supply costs. The prices rose even further4 after Russia’s invasion of Ukraine. Several oil companies in Singapore have raised pump prices by between 6 and 21 cents per litre.

As Russia is the world’s second-largest exporter of oil, the conflict will most likely disrupt worldwide oil supply. The price of Brent crude oil, which is often used as a benchmark for crude oil prices, has also reached $100 per barrel for the first time since 2014.

By aggravating existing supply-side costs, the conflict in Ukraine is inflating oil prices in Singapore.

Electricity and Natural Gas

Electricity in Singapore and the natural gas used to produce it is also getting more expensive. Due to an increase in tariffs, electricity and gas inflation in Singapore had already risen to 17.2 percent5 last month. Meanwhile, the Russia-Ukraine conflict has made the global gas supply more unpredictable and increased gas prices in Europe by nearly 70 percent6. This impacts the global energy market, which Singapore is a part of.

The Singapore Minister of Trade and Industry also noted yesterday7 that the price of liquified natural gas (LNG) is double of what it was half a year ago. While natural gas importers in Singapore are generally optimistic8 about their ability to continue supplying Singapore, an adequate supply would not prevent gas prices from rising. This also means electricity prices will rise further, given that natural gas produces 95% of our country’s electricity.

Metals

The conflict may also disrupt the supply of certain metals, increasing the prices of these metals and the goods they are used in. The Minister of Trade Industry yesterday used the examples of how a decrease in the supply of nickel and palladium could affect the production of stainless steel and semiconductors respectively7.

What Prices in Singapore Are Dropping Due to the War?

”stocks”

Stocks

The prices of stocks in Singapore are falling due to the conflict. When Russia’s invasion of Ukraine began, share prices in Singapore dropped and led to the Straits Times Index (STI) closing 3.5. percent lower. Of all the countries in Asia, news of the Russian invasion had the most impact on shares in Singapore9.

Just yesterday (28 February 2022), the STI also fell by 1.59 percent10 as Singapore announced that it was joining countries around the world and imposing sanctions on Russia. The share prices of local banks in the STI had some of the more steeper falls, with DBS Bank falling by 3.2 percent, OCBC Bank by 1.5 percent and UOB by 2.2 percent.

The conflict in Ukraine, and Singapore’s subsequent sanctions on Russia, has led to greater concern over economic conditions in Singapore and a general decrease in stock prices.

Cryptocurrencies

Like stocks, the price of cryptocurrencies worldwide fell when the war broke out and have been extremely volatile ever since. The Ukraine conflict has helped to wipe around USD 500 billion11 from the cryptocurrency market in the past few days - the market cap is now half of what is was last November. The massive volatility means that cryptocurrencies might not be the safe-haven assets that some have expected it to be.

What Can You Do to Manage the Impact of the War?

”coins”

A war in Europe has far-reaching consequences for the world, especially for a global hub like Singapore. While many of us are not directly involved in the Russia-Ukraine conflict, there are some measures we can take to minimize the economic impact of the war on our daily lives.

Save

One way to increase your financial security is to save some money in a bank account. This allows you to set aside a sum of money that can be used for emergencies. To better mitigate the inflationary pressures caused by the Russian-Ukraine conflict and other events around the globe, you should deposit your money in an account with a high interest rate. This means that inflation would impact your savings less.

The Standard Chartered Bonus$aver account provides one of the higher effective savings interest rates in Singapore. You can check out our page on the best bank savings accounts in Singapore for more of our recommendations.

  • Consider if: You're a high-earner open to a banking relationship with Standard Chartered
  • Promotions:
  • Read Our Full Review
  • Minimum Initial Deposit: S$0
  • Minimum Average Daily Balance: S$3,000
  • Fall Below Fee: S$5 (No Waiver)
  • Max Effective Interest Rate: 4.88% p.a. at S$100,000 balance
Rate TypeDetails & RequirementsInterest Rate
Base RateNo Requirements; applied to entire balance0.01% p.a.
Credit/Debit Spend Bonus
  • Spend monthly on a Bonus$aver card
  • (Bonus added to base rate)
+0.20% p.a. w/ S$500-S$1.99k spend
+0.40% p.a. w/ S$2k+ spend
Salary Credit Bonus
  • Credit S$3k+/month salary
  • (Bonus added to base rate)
+0.10% p.a. on 1st S$100k
Product Bonus
  • Invest with or buy insurance from SC
  • (Bonus added to base rate)
+0.90% p.a. on 1st S$100k
GIRO Bill-Pay Bonus
  • Make 3+ online bill payments via GIRO
  • (Bonus added to base rate)
+0.07% p.a. on first S$100k
Max Effective Interest Rate:2.38% p.a. (at S$100k balance)
Promotional rates, if any, are not included
Standard Chartered Bonus$aver Account is the best option on the market for affluent individuals open to a banking relationship with Standard Chartered. Account holders earn rate boosts by:
  • crediting a salary of at least S$3,000/month
  • spending S$500–S$2,000+/month on a Bonus$aver credit or debit card
  • purchasing an eligible investment or insurance product
  • paying at least 3 bills per month online

These bonuses can be unlocked individually but obtaining all 4 will allow consumers to earn up to 2.38% p.a. interest. This is one of the highest effective rates currently on the market, and can be achieved at S$80,000 balance. It's worth pointing out that this account is best suited for wealthier consumers due to its minimum salary requirement, higher card spend requirement and the requirement to buy a big financial product to enjoy a boost. There's also a rather sizable S$3,000 minimum balance requirement and S$5 fall below fee, which can be problematic for consumers who have less in savings.

Learn About Other Standard Chartered Products
  • Consider if: You're a high-earner open to a banking relationship with Standard Chartered
  • Promotions:
  • Read Our Full Review
  • Minimum Initial Deposit: S$0
  • Minimum Average Daily Balance: S$3,000
  • Fall Below Fee: S$5 (No Waiver)
  • Max EIR: 4.88% p.a. at S$100,000 balance
SC Bonus$aver Account Interest Rates
Base Rate: No requirements (applied to entire balance)
  • 0.01% p.a.
Spend Bonus: Spend monthly on a Bonus$aver credit or debit card (bonus added to base rate)
  • +0.20% p.a. w/ S$500-S$1.9k spend
  • +0.40% p.a. w/ S$2k+ spend
Salary Credit Bonus: Credit S$3k+ salary to account (bonus added to base rate)
  • +0.10% p.a. on first S$100k
Product Bonus: Invest with or buy insurance with SC (bonus added to base rate)
  • +0.90% p.a. on first S$100k
GIRO Bill-Pay Bonus: Pay 3+ bills online via GIRO (bonus added to base rate)
  • +0.07% p.a. on first S$100k
Max Effective Interest Rate:
  • 2.38% p.a. (at S$100k balance)
Promotional rates, if any, are not included
on_current="true" title="Analyst's Review" style="article" open="false" Standard Chartered Bonus$aver Account Standard Chartered Bonus$aver Account is the best option on the market for affluent individuals open to a banking relationship with Standard Chartered. Account holders earn rate boosts by:
  • crediting a salary of at least S$3,000/month
  • spending S$500–S$2,000+/month on a Bonus$aver credit or debit card
  • purchasing an eligible investment or insurance product
  • paying at least 3 bills per month online

These bonuses can be unlocked individually, but obtaining all 4 will allow consumers to earn up to 2.38% p.a. interest. This is one of the highest effective rates currently on the market, and can be achieved at S$80,000 balance. It's worth pointing out that this account is best suited for wealthier consumers due to its minimum salary requirement, higher card spend requirement and the requirement to buy a big financial product to enjoy a boost. There's also a rather sizable S$3,000 minimum balance requirement and S$5 fall below fee, which can be problematic for consumers who have less in savings.

Learn About Other Standard Chartered Products

Invest

Savings alone are not enough to weather the rise in inflationary pressures. The rate of inflation tends to be higher than the interest rates of most bank savings accounts. This means that if you keep all your money in a savings account, your purchasing power will weaken over time.

One way of protecting your purchasing power is to invest in assets such as stocks or bonds. You will be able to better preserve your wealth if your return on investment is greater than the rate of inflation.

Check out our articles on making investments in Singapore to find out more.

Trade

If you are into trading, you can also take advantage of the falling stock prices by shorting stocks. This means that you will profit if the value of the stock falls. This can be a good way of making profits in a relatively short period of time. However, note that short-term trading generally carries more risk than long-term investing.

You can trade in Singapore using an online trading platform or brokerage. A popular choice in Singapore is Saxo Markets.

Consider this if you want a trading platform with great market access and minimal fees

Buy Insurance

Contrary to what some might believe, insurance does not cover damages that are a result of war. Even so, insurance can cushion the blow to your savings if you were to suffer unexpected losses, such as through an accident or medical emergency.

You can find out more about the insurance policies available on our page about insurance in Singapore.

Conclusion

While the war in Ukraine may seem far from Singapore, the global economy is more connected now than ever before. Although we will be affected by the economic shockwaves of the war, we can still mitigate the impacts through proper financial planning.

Citations

1. Singapore Consumer Price Index (2019 as Base Year) January 2022. Singapore Department of Statistics. (n.d.). Retrieved March 1, 2022, from https://www.singstat.gov.sg/-/media/files/news/cpijan2022.pdf

2. Elkin, E., & Smith, A. N. (2022, February 24). The War in Ukraine Is Going to Make It More Expensive for You to Put Food on the Table. Time. Retrieved March 1, 2022, from https://time.com/6151242/ukraine-food-inflation-cost-of-living/

3. Tan, C. (2022, February 14). Pump prices post double-digit increases in two weeks on the back of costlier oil. The Straits Times. Retrieved March 1, 2022, from https://www.straitstimes.com/singapore/transport/pump-prices-post-double-digit-increases-in-two-weeks-driven-by-higher-crude-oil-costs

4. Tan, C. (2022, February 25). Pump prices in S'pore surge on the back of Russian invasion of Ukraine. The Straits Times. Retrieved March 1, 2022, from https://www.straitstimes.com/singapore/transport/pump-prices-surge-on-the-back-of-russian-invasion-of-ukraine

5. Choo, Y. T. (2022, February 25). Rising prices and volatility: How the Ukraine crisis could impact Singaporeans. The Straits Times. Retrieved March 1, 2022, from https://www.straitstimes.com/business/rising-prices-and-volatility-how-the-ukraine-crisis-could-impact-singaporeans

6. Hume, N., Terazono, E., & Wilson, T. (2022, February 25). European gas prices soar and oil tops $105 after Russia attacks Ukraine. Financial Times. Retrieved March 1, 2022, from https://www.ft.com/content/c6303127-5edf-4256-9c25-effa75766002

7. Ang, H. M. (2022, February 28). Petrol, electricity prices will rise as Ukraine crisis pushes up global energy costs: Gan Kim Yong. The Straits Times. Retrieved March 1, 2022, from https://www.channelnewsasia.com/singapore/ukraine-russia-invasion-electricity-petrol-prices-singapore-gan-kim-yong-2525736

8. Subhani, O., & Pachymuthu, L. (2022, February 25). Ukraine crisis: S'pore LNG importers confident of supply continuity, but power bills likely to rise. The Straits Times. Retrieved March 1, 2022, from https://www.straitstimes.com/business/economy/singapore-lng-importers-face-test-of-resilience-as-ukraine-crisis-turns-global-supplies-unpredictable

9. Leong, G., & Williams, A. (2022, February 24). Global stocks dive, STI sinks 3.5% as Russia launches military attack on Ukraine. The Straits Times. Retrieved March 1, 2022, from https://www.straitstimes.com/business/companies-markets/asia-stocks-tumble-as-us-warns-of-imminent-russian-invasion-of-ukraine-sti-down-16

10. Subhani, O. (2022, February 28). Banks drag local stocks down as Singapore imposes sanctions against Russia over Ukraine invasion. The Straits Times. Retrieved March 1, 2022, from https://www.straitstimes.com/business/economy/banks-drag-local-stocks-down-as-singapore-imposes-sanctions-against-russia-over-ukraine-invasion

11. Turner-Cohen, A. (2022, February 28). ‘Investors flee’: Bitcoin price warning as war escalates. News.com.au. Retrieved March 1, 2022, from https://www.news.com.au/finance/markets/world-markets/investors-flee-bitcoin-price-warning-as-war-escalates/news-story/ea9f42d1ea35b3e71d757e211d34f706

Benedict Khong

Ben spent 3.5 years working in London in a British bank and subsequently, a FinTech startup. Upon returning home to Singapore, he spent 4 years at a local FinTech startup where he combined financial data with non-traditional data sources to provide loans to over 10,000 SMEs. He has also spent time at Amazon, building up the data infrastructure for the APAC Leadership team. Today, Ben works as a product and data consultant with several local FinTechs and SMEs.