CUT-OFF yields on the latest 12-month Treasury bill (T-bill) have dipped slightly to reach 3.7 per cent, marginally lower than July’s tranche at 3.74 per cent interest.

This comes amid higher demand, as the bid-to-cover ratio for the latest tranche was 2.65, higher than the previous round, which was 2.11 times subscribed.

Again, all non-competitive bids were allocated, while 64 per cent of competitive bids, or S$1.4 billion, were allocated – lower than the last issuance, where three-quarters of competitive bids were allocated.

October’s 12-month T-bills had a slightly larger allotment size at S$4.5 billion, up from the previous S$4.4 billion.

The average yield this month was 3.32 per cent, and the median yield was 3.55 per cent. In July, the average yield was only 3.09 per cent, while the median yield was 3.5 per cent.

Eugene Leow, senior rates strategist at DBS, said: “T-bills are undoubtedly in demand, given that returns are risk-free and meaningful. This is amplified by the weak performance generally across equities and bonds.”

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He foresees demand for T-bills to remain for some time, given that the interest rates offered are still high, while the T-bills interest rates are expected to remain range-bound – to stay within support and resistance limits, assuming rate hikes are off the table.