Yield for six-month T-bills falls below 3% for first time in 2 years

While seen as a safe investment, return of 2.97% is 0.13 point below last round's

- Chor Khieng Yuit

Yields continue to fall for six-month Treasury bills (T-bills), with the level at the Sept 26 auction going below 3 per cent for the first time since September 2022.

Investors will get a return of 2.97 per cent, down 0.13 percentage point from the 3.1 per cent recorded in the Sept 12 auction.

The auction came just days after the US Federal Reserve cut interest rates by a bigger-than-expected 50 basis points to a range of 4.75 per cent to 5 per cent.

The Sept 26 auction attracted applications amounting to $13.9 billion for the $6.8 billion on offer, just ahead of the $13.4 billion worth of applications at the previous auction.

Mr Wong Di Ming, research analyst in the bond research team at Bondsupermart, said the yields on six-month T-bills dropped significantly in two of the three auctions in August, ahead of the US Fed meeting on Sept 18.

Yields at the Aug 1 auction came in at 3.4 per cent, down 0.24 percentage point from the 3.64 per cent recorded in the July 18 auction.

It was more of the same on Aug 29 with yields at 3.13 per cent, down 0.21 percentage point from 3.34 per cent on Aug 15.

Mr Wong said yields are likely to continue falling if the Fed cuts rates further.

“With policy rates falling, it would be inevitable for short-end rates to begin falling, especially given that Singapore is an interest-rate taker and heavily influenced by US interest rates,” he added.