Does Singapore Banks or Government or MAS set Interest rates targets for SIBOR or SOR?
Singapore’s interest rates are consistently set at a low level. Though we are not sure “SET” is the right word, because there are many factors including the liquidity of banks in Singapore which helps “SET” the interest rate environment. Banks that are flushed with cash from depositor’s funds who do not need all these funds will then release it into the Inter-bank market available to as funds to be borrowed by other financial institutions. The rate is called, the Singapore Inter-bank offered Rate (SIBOR). This is the rate at which the banks lend to each other and Sibor is traded and published in the Association of banks of Singapore (ABS). Singapore’s interest rates are consistently lower than that of the US and that of Australia. This ensures that Gross Fixed capital investment is maintained at a higher level of which a significant portion goes into investment of plant, machinery, software, etc. All of which could significantly enhance the long term productivity and efficiency of the
