Latest Singapore 6-month T-bill cut-off yield falls slightly to 3.1%

THE cut-off yield on the latest Singapore six-month Treasury bill (T-bill) fell to 3.1 per cent, auction results released by the Monetary Authority of Singapore on Thursday (Sep 12) indicated.

This is down from the 3.13 per cent offered in the previous six-month auction, that closed on Aug 29. 

Demand fell in the latest tranche. The auction received a total of S$13.4 billion in applications for the S$6.9 billion on offer, representing a bid-to-cover ratio of 1.95.

In comparison, the previous auction received a total of S$16 billion in applications for S$6.8 billion on offer, representing a bid-to-cover ratio of 2.35.

Median yield for the latest auction stood at 3.01 per cent, up slightly from 3 per cent in the previous auction. Average yield rose to 2.9 per cent, up from 2.62 per cent previously.

All non-competitive applications totalling S$1.7 billion were allocated in the latest auction. 

The percentage of competitive applications allotted at the cut-off yield was approximately 61 per cent. 

On Wednesday, US central bankers said it will likely start long-awaited interest-rate cuts next week with a quarter-of-a-percentage-point reduction. 

Traders now see just a 15 per cent chance of a half-point rate cut at the Fed’s Sep 17 to 18 policy-setting meeting, down from about 29 per cent. 

Their comments come about two weeks after the Fed Chair Jerome Powell on Aug 23 stated that the “time has come” for the US central bank to cut interest rates. 

T-bill yields hit a 30-year high of 4.4 per cent in December 2022, amid the high-interest-rate environment.