SIBOR is the acronym for Singapore InterBank Offer Rate. In layman
terms, it simply represents the interest rate that Singapore banks
charge to lend to each other. SIBOR is regularly used as a reference
rate where loans are pegged to. SIBOR is set daily (working days)
by the Association of Banks in Singapore and is publicly available
on Association of Banks in Singapore website.
In general the shorter the time period SIBOR is based on, the lower
and more volatile the interest rate. The 3 Month SIBOR rate is currently
around 1.95% while the 1 Month SIBOR rate is around
1.82% with rates accurate as of Mar 2019.
What about SOR, Fixed Deposit Linked Rates, Combo, etc?
SOR is the acronym for Swap Offer Rate and is basically the interest
rate a borrower will be charged if he or she were to borrow in US
dollars. Fixed Deposit Linked rates are reference rates that are
based on a bank's fixed deposit rates while Combo Rate is a combination
of SIBOR and SOR.
All of the mentioned rates are reference rates where loans are
priced in but SIBOR remains the most popular reference rate for
loans to be priced in due to its transparency. Hence, any movement
in SIBOR rates is closely monitored as it could affect repayment
of loans and also financial markets. It is also worth noting that
all these reference rates usually move in tandem with each other
in the same direction. See SIBOR
vs Fixed Deposit Linked Rates vs SOR vs Combo for a more detailed
discussion about how to choose the best reference rate for loan
3 Month SIBOR Rate History Chart
3 Month SIBOR Rate Historical Data for Past Year
1 Month SIBOR Rate History Chart
1 Month SIBOR Rate Historical Data for Past Year
Future Direction of SIBOR?
Both chart and data for 3 month and 1 month SIBOR indicates that
we have most likely seen a bottom in SIBOR rates in between 2011
and 2014. Borrowers who fear a spike in SIBOR rates can rest assure
as SIBOR rates tends to spike only during financial crisis. In fact,
rates have remained well below historically averages despite rising
in recent months. With the rising rates, it will be most prudent
for borrowers to take into account of a possibility of a rise of
SIBOR to more normal rates of between 2% to 3% when taking a loan
so as not to overstretch themselves.