Cut-off yield for latest 6-month T-bill falls to 3.75% as demand grows

THE cut-off yield for the latest six-month T-bill fell to 3.75 per cent as demand for this round rose, according to data on the Monetary Authority of Singapore’s (MAS) website on Wednesday (Nov 8).

The bid-to-cover ratio this time was 2.31, higher than last tranche’s 2.02. The cut-off yield at the last round was also higher, at 3.95 per cent.

The total amount allotted at the most recent round was S$5.7 billion, unchanged from the last round, with S$2.3 billion allotted to non-competitive bids. The total amount applied was S$13.2 billion, with none allotted to MAS.

Approximately 98 per cent of competitive bids made at the cut-off yield were allotted, while 95 per cent of non-competitive bids were allotted.

The median yield for this round was 3.65 per cent and the average yield was 2.71 per cent.

Song Seng Wun, Singapore economic adviser at CGS-CIMB, said there were no surprises at this round’s T-bill results, given that it was in line with market expectations from earlier that interest rates may have peaked.

“We’ve seen people essentially taking a more cautious view that the rate cycle may have peaked… and that has been reflected in the interest rate expectation,” he said.

Commenting on the outlook of T-bill yields for the year, Song said: “A lot will depend on external events… on how the global growth momentum will pan out in the coming couple of quarters.”

He added: “For now, the expectation is that the worst of the monetary policy tightening may be behind us as economies around the world are heading for a soft landing, and therefore we don’t see the major central banks tightening further.”