The three-month Singapore interbank offered rate (SIBOR) on Tuesday charged past the 1 percent level, rising 0.9 percent to 1.001 percent from Monday’s fixing of 0.992 percent, according to the data posted on Bloomberg.
The rate is now at a level not seen in more than six year, and as SIBOR is the rate to which most home loans are pegged at, the increase signals further increase in mortgage rates in the coming weeks.
SIBOR—the rate at which banks loan to one another—has been seen steadily rising since December last year and has more than doubled from the fixing rate of 0.45 in the beginning of 2015.
It is noted that last year, financial analysts said they expect the 3-month SIBOR to hit at least the 1 percent this year.
The rise is attributed to widespread expectations that the US Federal Reserve will raise benchmark interest rates by Q3 this year. The continuing weakness of the Singapore dollar against the greenback also pushed the rates higher as investors need more incentive to hold on to the local currency.
The current trading rate of the Singapore dollar to its US counterpart is S$1.37. It fell to a year-low of S$1.39 against the US dollar on March 18 following the Fed’s announcement last week.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg.
