Singapore's 3-month Sibor rate slips to 2-week low

[SINGAPORE] Singapore's benchmark three-month interest rate eased to a two-week low on Tuesday, after the Singapore dollar rose as the Monetary Authority of Singapore kept its exchange-rate based policy unchanged.

The three-month Singapore interbank offered rate (Sibor), which is used to set floating-rate mortgages, slipped to 1.01441 per cent, its lowest level since March 30.

Three-month Sibor is still up by nearly 56 basis points so far this year, putting it on track for its biggest annual increase since 2005, reflecting tighter conditions in the domestic money market and weakness in the Singapore dollar .

A softer Singapore dollar can put upward pressure on local interest rates as investors seek higher yields as compensation for holding the weakening currency.

REUTERS