THE 10-year average return for the July issue of Singapore Savings’ Bond (SSB) soared to one of its highest at 2.71 per cent, just a few basis points short of its last peak in November 2015.

The first-year interest rate for the SSB stands at 1.69 per cent, while its 10-year interest rate was offered at 3 per cent.

The higher interest rates reflect the tightening economic environment in recent times, coupled with expectations of further rate hikes from the Fed after it raised benchmark interest rates three-quarters of a percentage point — representative of its most aggressive hike since 1994. Published forecasts also showed that most policymakers expect rates would rise to 3.4 per cent by the end of the year.

The maximum amount offered in the upcoming issue of SSBs is capped at S$600 million. The first interest payment will be made on Jan 1, and subsequently pay out every 6 months on Jul 1 and Jan 1 until maturity.

Applications for the last round of bonds issued in June totaled S$916.5 million, though only S$350.0 million were alloted.

The first-year interest rate was 1.43 per cent and the 10-year interest rate stood at 2.71 per cent. The average return over 10 years was valued at 2.53 per cent per annum.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Applications for the July issue of SSBs closed on Monday.

Data released by the Monetary Authority of Singapore on Tuesday afternoon showed that application for the round of issuance rounded to just over S$1.3 billion, a record high since the fixed income instrument was launched in 2015.