Singapore’s key benchmark rate for mortgages hit a seven-year high on Monday, as investors make a move ahead of the anticipated hikes in US interest rates with a Federal Reserve meeting scheduled later this week.
The three-month Singapore Interbank Offered Rate (SIBOR) — the rate at which banks loan from one another — rose from 1.07483 percent last Thursday to 1.13100 percent yesterday – its highest since 2008, revealed data from the Association of Banks in Singapore.
This is a 5.3 percent increase from a week ago, and is up 147 percent from the beginning of the year.
SIBOR is the rate at which most home loans are pegged at. Experts say rising interest rates could continue to put downward pressure on residential property investors as the market continues to struggle with lower resale values and falling rents.
An increasing SIBOR also reflects tighter domestic money market conditions and weakness in the Singapore dollar. Weakness of the local currency versus its foreign counterparts may put upward pressure on local interest rates as investors seek more incentives to hold on to the local currency.
Meanwhile, the Singapore dollar recovered slightly against the greenback yesterday from 1.4277 last Monday, 7 September — its lowest level since September 2009. It is now trading at 1.4071 per $1.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
