Delving into why T-bills went to 4% Yield
By Investmoolah  •  October 1, 2023

This week T bills went to 4% and that is headlines news to the yield hungry community of Singapore. Yields in Singapore has been relatively low where a 4% risk free instrument is rare (unlike what UK/Europe/USA risk free bonds offers at 4-5%).

What made Singapore T bills go to 4%?

The answer is simple. This T bill tranche had the lowest application amount of US$9.3 billion.

Where Did the Money Go?

If I were to venture a guess, most of the money that did not bid for Singapore's T bills are institution money which are more mobile. With countries such as Europe offering risk free rates of 4%, it is more intuitive to park funds there. This results in Singapore T bills having a lower demand and hence a higher cut off yieldr. Somehow the cut off yield for this tranche matches the rates announced

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By Investmoolah
A total otaku who loves anime, investing and the occasional K-drama. My financial journey begun at the age of 22 and has revolved around the concepts of "Working Hard", "Saving Well" and "Investing Wisely". Through my journey, I have realized that financial literacy is something we have learnt little during our school days but is one of the most useful and relevant skill that we have to be equipped to take on the real world. Concepts such as compounding and "common sense investing" are skills that will place us ahead of the race to retirement ...

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