Latest Singapore 6-month T-bill offers 3.34% cut-off yield

THE cut-off yield on the latest Singapore six-month Treasury bill (T-bill) fell to 3.34 per cent, auction results released by the Monetary Authority of Singapore on Thursday (Aug 15) indicated.

This is down from the 3.4 per cent offered in the previous six-month auction, which closed on Aug 1.

Demand fell in the latest tranche. The auction received a total of S$16 billion in applications for the S$6.9 billion on offer, representing a bid-to-cover ratio of 2.32.

In comparison, the previous auction received a total application of S$18 billion for the S$6.8 billion on offer.

The median yield in the latest auction stood at 3.2 per cent, from 3.3 per cent in the previous auction, while the average yield inched down to 2.83 per cent, from 2.85 per cent previously.

All non-competitive applications totalling S$2.4 billion were allocated in the latest auction. Meanwhile, about 30 per cent of competitive applications were allotted at the cut-off yield.

Cheong Wei Ming, portfolio manager of fixed income at Eastspring Investments, said: “In Singapore, yields on T-bills and Singapore Government Securities bonds have fallen in line with the sharp decline in US dollar rates over the recent weeks as investors reposition to the expected easing.”

While Cheong pointed out that volatility could persist over the second half of the year, he believes the peak of the rate hike cycle has passed and expects rates to trend lower over time.

Last month, US Federal Reserve chief Jerome Powell signalled that policymakers may lower interest rates at their next meeting in September, as inflation rates fall towards the central bank’s 2 per cent target.

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Latest Singapore 6-month T-bill cut-off yield falls to 3.4%; SSB 10-year return at 3.1%

T-bill yields hit a 30-year high of 4.4 per cent in December 2022, amid the high-interest-rate environment.