What happened?

The cut-off yield on the latest 6-month Singapore T-bill auction (BS23120A) on 12 October 2023 fell to 3.87%. This came as a disappointment to many investors, especially after the cut-off yield jumped above the 4% mark to reach 4.07% in the previous auction. Source: MAS That said, the cut-off yield is still higher than what we have seen for most of August and September, when the cut-off yield hovered at the 3.70-3.80% range.  Let us find out why is driving the fall in the cut-off yield in the latest 6-month Singapore T-bill auction.

What we learnt from the latest Singapore T-bill auction

#1 – Demand for T-bills surged

The total amount of applications for the latest Singapore T-bill was at S$14.7 billion, a staggering 58% or S$5.4 billion increase compared to the previous auction. The increase in applications was seen across both competitive and non-competitive bids.  The...