Latest Singapore 6-month T-bill offers cut-off yield of 3.7%

The latest Singapore six-month Treasury bill (T-bill) is offering a cut-off yield of 3.7 per cent, according to auction results released by the Monetary Authority of Singapore on Thursday (May 9).

This is down from the 3.74 per cent offered in the previous six-month auction, which closed on Apr 25.

Demand rose in the latest tranche. Applications totalled S$16.3 billion for the S$6.8 billion on offer, representing a bid-to-cover ratio of 2.4.

The previous auction received a total of S$14.4 billion in applications for the S$6.6 billion on offer.

Eugene Leow, senior rates strategist at DBS, noted that demand metrics were relatively firm, and the amount applied was also the highest this year for a T-bill auction.

“The cut-off yield is within the 3.7 to 3.8 per cent range that has generally applied over the past few months,” Leow said.

Around 81 per cent of non-competitive applications, totalling S$2.7 billion, were allocated.

Meanwhile, around 26 per cent of competitive applications at the cut-off yield were allotted. Those who specified a lower yield were fully allotted, and those who specified a higher yield were not.

T-bill yields hit a 30-year high of 4.4 per cent in December 2022, and have mostly hovered around the 3.7 to 3.8 per cent range since March 2023, amid the high-interest-rate environment.

Markets initially looked forward to more rate cuts this year, but have since dialled back on expectations due to persistently high inflation figures in the US.