Latest 6-month Treasury bill offers 3.85% cut-off yield

THE cut-off yield on Singapore’s latest six-month Treasury bill (T-bill) has fallen to 3.85 per cent, in the auction that closed on Thursday (Jul 20).

The auction received a total of S$12.2 billion in applications for the S$5.6 billion on offer, representing a bid-to-cover ratio of 2.18.

The latest cut-off yield was markedly lower than that of the previous six-month tenor of the T-bills, which was at 3.99 per cent. The previous auction also saw fewer applications, at S$10.3 billion for the S$5.4 billion on offer.

DBS senior rates strategist Eugene Leow noted that liquidity is seasonally tighter around the mid-year, and that the situation has eased somewhat in the latest auction.

“It could also well be that investors are aware of the previous high cut-off of close to 4 per cent, and got incentivised to put money to work at the most recent auction,” he said.

In the latest auction, non-competitive bids totalled S$2.2 billion and were fully allotted.

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Those who submitted competitive bids at the cut-off yield were allotted around 26 per cent of their applications. Those who specified a lower yield were fully allotted, and those who specified a higher yield were not allotted.

Last auction, those who submitted competitive bids at the cut-off yield were allotted just 2 per cent of their applications.