Following the central bank’s unexpected move to slow the Singapore dollar appreciation, the three-month Singapore Interbank Offered Rate (SIBOR) posted a 1.3 percent rise Wednesday (28 January) to 0.653 percent from Tuesday’s 0.644 percent.
The three-month SIBOR is commonly used to price most home loans.
On Wednesday, the Monetary Authority of Singapore announced that it will adjust the monetary policy to allow a slower pace in the appreciation of the Singapore dollar.
Interest rates are expected to rise when the Singapore dollar weakens and leads to capital outflows, as well as tightening liquidity conditions.
It is noted that SIBOR is the rate at which banks lend to one another. The three-month SIBOR was seen inching up since the beginning of the year on the back of the continued weakness of the local currency versus the green back. It hit a high of 0.654 in 15 January.