SINGAPORE - The three-month Singapore interbank offered rate (Sibor), which is used to set interest rates on mortgages, spiked to a fresh five-month high of 1.00208 per cent on Tuesday (Aug 25) from 0.9960 per cent the day before.
Since January, the three-month Sibor has more than doubled. It touched its highest level of 1.02705 per cent on April 9.
Sibor is likely to face further upward pressure as regional currencies continue to weaken against the greenback, in the wake of the devaluation of the yuan. A softer Singapore dollar can put upward pressure on local interest rates as investors seek higher yields as compensation for holding the weakening currency.
The Singdollar rebounded a little to 1.4062 on Tuesday from a five-year low of 1.4130 against the US dollar on Monday.
Another key local interest rate, the three-month Swap Offer Rate (SOR) - typically used to price corporate loans - spiked to a year high of 1.33242 per cent on Tuesday from 1.20457 per cent on Monday.