Singapore's interbank borrowing costs climbed to their highest level in over a year, driven by tighter local liquidity and expectations of further U.S. rate hikes. The overnight rate surged 11.7 basis points to 1.7446% as of Friday, marking the highest point since July 2025. Local markets were closed Monday for a holiday.
Markets are bracing for potential further tightening by the U.S. Federal Reserve, which raised its benchmark rate by 25 basis points in September before pausing in October. The Monetary Authority of Singapore held policy steady in October after prior tightening in April and July. Local liquidity has contracted as loan growth outpaced deposits, pushing the loan-to-deposit ratio to 69.8% in September -- the highest level since August 2024.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing