The May 2023 Financial Stability Report (FSR) indicates that apart from the challenges resulting from the subdued and fragile global growth; high inflation and resultant tighter global financial conditions, persistent geopolitical risks, as well as the scarring and/or lingering effects of the COVID-19 pandemic, the domestic financial system remains resilient and robust, thus continues to be safe and sound as well as unconstrained in providing and growing the range of financial services to support the economy.
Overall, vulnerabilities remain generally contained in the financial and non-financial sectors since the opening of the economy. However, there is a high level of contagion risk, borne by strong interlinkages in the domestic financial system. Meanwhile, macroeconomic risks are considered moderate and risks from the external sector, as well as credit and liquidity markets are low. Notably, vulnerabilities could be worsened by rising geopolitical tensions, increased risk of recession in advanced economies and continued exposure to cyber threats due to increasing usage of technology, as well as climate-related financial risks.
Access the full May 2023 Financial Stability Report here (link to website).