THE cut-off yield on the latest Singapore six-month Treasury bill (T-bill) rose to 3.06 per cent, auction results released by the Monetary Authority of Singapore on Thursday (Oct 10) indicated.
This is up from the 2.97 per cent offered in the previous six-month auction that closed on Sep 26. The previous auction was also the first time yield fell below the 3 per cent mark since September 2022.
Yields stayed elevated in the past two years as the US Federal Reserve kept interest rates high to combat post-pandemic inflation.
Demand rose in the latest tranche. The auction received a total of S$14.9 billion in applications for the S$6.8 billion on offer, representing a bid-to-cover ratio of 2.19.
In comparison, the previous auction received S$13.9 billion in applications for the S$6.8 billion on offer, representing a bid-to-cover ratio of 2.05.
Median yield for the latest auction stood at 2.9 per cent, up from 2.85 per cent in the previous auction. Average yield inched down to 2.76 per cent, from 2.79 per cent previously.
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Non-competitive bids totalled S$1.4 billion and were fully allotted.
About 68 per cent of competitive applications at the cut-off yield were allotted.
T-bills yields hit a 30-year high of 4.4 per cent in December 2022, and have hovered above the 3 per cent level since.
However, when the Fed slashed interest rates by 50 basis points (bps) in September, yield fell. Some analysts had said previously that they expect T-bill rates to continue falling in the coming months as they await further rate cuts.
Analysts from UOB Global Economics and Markets Research said in a note on Thursday that they project 50 bps cuts for the remainder of 2024. They also maintained their estimations of 100 bps of cuts in 2025.
