SINGAPORE - The latest Singapore six-month Treasury bill (T-bill) offered a cut-off yield of 4.07 per cent, in the auction that closed on Thursday.

This is a jump from the cut-off yield of 3.7 per cent for the previous six-month tenor, and the first time that yields have crossed the 4 per cent mark since January.

Demand for the T-bills was down in the latest auction, with a total of $9.3 billion in applications, representing a bid-to-cover ratio of 1.76. The last auction had a bid-to-cover ratio of 2.03, with $11.2 billion in applications against $5.5 billion allotted.

Mr Eugene Leow, senior rates strategist at DBS, said the spike in the cut-off yield is likely an anomaly, especially given that the Singapore Overnight Rate Average (Sora) fixings and cut-offs on MAS bills have been stable. Some worries about further US interest rate hikes by the end of the year may also be kicking in, he added.

In the latest auction, non-competitive bids totalled $1.8 billion and were fully allotted. Around 99 per cent of competitive applications at the cut-off yield were allotted. Those who specified a lower yield were fully allotted, and those who specified a higher yield were not allotted. T-bill yields hit a 30-year high of 4.4 per cent in December 2022, but have hovered around the 3.7 to 3.8 per cent range since March this year, apart from an auction in July when yields rose to 3.99 per cent. THE BUSINESS TIMES