Latest Singapore six-month T-bill cut-off yield slides to 1.37%
Figure is down from the 1.41% offered from the last auction that closed on Oct 23
[SINGAPORE] The cut-off yield on Singapore’s latest six-month Treasury bill (T-bill) fell to 1.37 per cent, based on auction results released by the Monetary Authority of Singapore on Thursday (Nov 6).
This was a decrease from the 1.41 per cent offered in the previous six-month auction that closed on Oct 23.
The auction received a total of S$18.6 billion in applications for the S$8 billion on offer, representing a bid-to-cover ratio of 2.33.
In comparison, the previous auction received a total of S$15.9 billion in applications for the S$7.9 billion on offer, which worked out to 2.01 for the bid-to-cover ratio.
The median yield for the latest auction stood at 1.3 per cent, down from 1.35 per cent in the previous auction.
The average yield fell to 1.14 per cent, from 1.29 per cent previously.
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All non-competitive bids were allotted, amounting to S$1.3 billion, while around 14 per cent of competitive applications at the cut-off yield were allotted.
Frances Cheung, head of foreign exchange and rates strategy at OCBC, noted that “front-end Singapore dollar (SGD) interest rates have been hovering around low levels as liquidity remains flush”.
The decline is “in line with market traded interest rate movement”, she added. “Yields may still fluctuate in a low range near term, while on a multi-month horizon we continue to look for some upward normalisation.”
Meanwhile, DBS senior rates strategist Eugene Leow said: “T-bill cut-off rates have bounced around in a tight 1.35 to 1.45 per cent range since early September.”
“Even with the Fed having cut (its rates) by 50 basis points thus far, the pass-through to short-term SGD rates appear limited,” he noted. “The current cut-off is just one basis point lower than the issue in early September, before the Fed cut.”
He added: “If stock markets stay buoyant, demand for T-bills from a retail perspective would likely weaken.”
Singapore will issue up to another S$450 billion in government securities, with a parliamentary motion having been passed in November last year to raise the government’s issuance limit to S$1.515 trillion, from S$1.065 trillion in 2021. The new limit is expected to last until 2029.
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