[SINGAPORE] The cut-off yield for Singapore’s latest six-month Treasury bill (T-bill) fell to 2.38 per cent, the auction results by the Monetary Authority of Singapore on Thursday (Apr 24) showed.
This marked a decline from the 2.5 per cent cut-off yield offered in the previous six-month auction that closed on Apr 10. It is also the lowest level that cut-off yields of six-month T-bills have fallen to in the year to date.
Demand for the latest tranche shrank as the auction received S$16.6 billion in applications for the S$7.4 billion on offer, representing a bid-to-cover ratio of 2.24.
In comparison, the previous auction received S$17.2 billion in applications for the S$7.4 billion on offer, translating to a bid-to-cover ratio of 2.32.
Median yield for the latest auction stood at 2.32 per cent, lower than the 2.4 per cent median yield of the previous round. Average yield rose marginally to 2.16 per cent from 2.1 per cent previously. All non-competitive bids were allotted, amounting to S$1.4 billion, compared with S$1.6 billion in the last auction.
Meanwhile, around 17 per cent of competitive applications at the cut-off yield were allotted, up from 9 per cent at the previous auction.
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OCBC head of foreign exchange and rates strategy Frances Cheung said that the latest auction’s lower cut-off yield came in line with market Singapore dollar interest rates, which have dipped since the last six-month T-bills auction.
Noting that Singapore dollar liquidity appears to have remained flush, Cheung noted: “While we continue to see two-way risks surrounding Singapore dollar interest rates, further downsides… may be more limited compared to the rapid downward moves so far this year.”
She added: “For tenors of two years and three years, we see a chance for Singapore dollar rates to bottom out.”
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 previously. The new limit is expected to last until 2029.
