Latest Singapore 6-month T-bill cut-off yield falls to 2.99%

This is down from the 3.06% offered in the previous auction that closed on Oct 10

THE cut-off yield on the latest Singapore six-month Treasury bill (T-bill) fell to 2.99 per cent, auction results released by the Monetary Authority of Singapore on Thursday (Oct 24) showed.

This is down from the 3.06 per cent offered in the previous six-month auction that closed on Oct 10.

Calling the last result a “blip”, some analysts had maintained that T-bill rates should decline over the next few months amid further rate cuts by the US Federal Reserve.

At the rate decision in September, policymakers had pencilled in a total of 50 basis points (bps) of cuts over the two remaining rate decisions this year, suggesting either one more large cut, or two smaller cuts of 25 bps.

Demand dropped in the latest tranche. The auction received a total of S$13.5 billion in applications for the S$6.8 billion on offer, representing a bid-to-cover ratio of 1.99.

In comparison, the previous auction received S$14.9 billion in applications for the S$6.8 billion on offer, representing a bid-to-cover ratio of 2.19.

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Median yield for the latest auction stood at 2.93 per cent, inching up from 2.9 per cent in the previous auction.

Average yield increased to 2.84 per cent, from 2.76 per cent previously.

Non-competitive bids totalled S$1.4 billion and were fully allocated. About 46 per cent of competitive applications at the cut-off yield were allotted.

Singapore T-bill yields hit a 30-year high of 4.4 per cent in December 2022. Yields had stayed elevated during the past two years as the Fed kept interest rates high to combat post-Covid-19-pandemic inflation.