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 popular 3 Month SIBOR rate
is currently around 1.12% with rates accurate as
of Sep 2017.
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
Future Direction of SIBOR?
Both chart and data for 3 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 slowly in reent
months. Despite that, 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