Cut-off yield on latest Singapore 6-month T-bill falls to 3.75%

THE cut-off yield on Singapore’s latest six-month Treasury bill (T-bill) has fallen to 3.75 per cent in the auction that closed on Thursday (Aug 3).

The cut-off yield continued its downtrend from the previous six-month tenor of the T-bills, which offered a cut-off yield of 3.85 per cent.

Demand for the latest auction rose slightly. The auction, which had S$5.5 billion on offer, received total applications of S$12.3 billion, representing a bid-to-cover ratio of 2.24.

The previous six-month tenor of the T-bills received a total of S$12.2 billion in applications for the S$5.6 billion on offer.

Eugene Leow, senior rates strategist at DBS, noted that liquidity conditions are becoming more normal, resulting in somewhat lower short-term Singapore dollar rates.

“That said, downside might be limited if the US Federal Reserve keeps rates steady for some time amid resilient data,” he said.

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In the latest auction, non-competitive bids totalled S$1.9 billion and were fully allotted.

Those who submitted competitive bids at the cut-off yield were allotted around 65 per cent of their applications. Those who specified a lower yield were fully allotted, and those who specified a higher yield were not allotted.

In July, the latest 12-month tenor of the T-bills closed its auction with a cut-off yield of 3.74 per cent. Some S$4.4 billion in 12-month T-bills were allotted, out of a total of S$9.3 billion applied.