As the Singapore dollar continues to weaken against the greenback following China’s move to devaluate the yuan, a key benchmark rate that’s used to price most of the housing loans here hit a four-month high on Thursday.
The three-month Singapore Interbank Offered Rate (SIBOR) climbed to 0.9388 percent two days ago, and weakend further to 0.9345 percent yesterday.
It was reported the banks have yet to adjust mortgage rates pegged to the SIBOR.
Currently, the rates are hovering around 1.5 to 1.7 percent, and may reach two percent by the end of the year.
SIBOR is the rate at which banks loan from one another, and is also the rate at which most home loans are pegged at. An increase in the SIBOR reflects tighter domestic money market conditions and weakness in the Singapore dollar. Weakness of the local currency versus its foreign counterparts can put upward pressure on local interest rates as investors seek more incentive to hold on to the local currency.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg.
