T-bill Cut-off Yield Falls to 3% in Latest Auction
THE cut-off yield on Singapore’s latest six-month Treasury bill (T-bill) fell to 3% auction results released by the Monetary Authority of Singapore on Thursday (Dec 5) showed.
Lower than Previous Auction
This was down from the 3.08% offered in the previous six-month auction that closed on Nov 21.
Highest Demand Ever
Demand for the latest tranche rose. The auction received a total of S$17.4 billion in applications for the S$7.1 billion on offer, representing a bid-to-cover ratio of 2.45.
In comparison, the previous auction received S$13.7 billion in applications for the S$7 billion on offer, representing a bid-to-cover ratio of 1.96.
Median and Average Yields
Median yield for the latest auction stood at 2.9%, down from 2.95% in the previous auction.
Average yield decreased to 2.73%, from 2.76% previously.
Bid Allocation
Non-competitive bids totalled S$2.4 billion and were fully allotted. About 4% of competitive applications at the cut-off yield were allotted.
New Government Securities Issuance
Singapore will issue up to another S$450 billion in government securities after a parliamentary motion was passed in November to raise the government’s issuance limit to S$1.515 trillion from S$1.065 trillion previously.
The new limit is expected to last until 2029.
More than 60% of the S$450 billion increase is anticipated to be issued as Special Singapore Government Securities to meet the investment needs of the Central Provident Fund.
The rest of the increase is for projected issuances of Singapore Savings Bonds, T-bills, and Singapore Government Securities (Market Development).
Conclusion
The cut-off yield on Singapore’s latest six-month Treasury bill fell to 3%, marking a decrease from the previous auction. Demand for the latest tranche rose, with a record number of applications received.
FAQs
Q: What is the new cut-off yield on Singapore’s latest six-month Treasury bill?
A: The cut-off yield is 3%.
Q: How does the latest auction compare to the previous one?
A: The latest auction saw a decrease in the cut-off yield, from 3.08% to 3%.
Q: What is the bid-to-cover ratio for the latest auction?
A: The bid-to-cover ratio is 2.45.
Q: What is the total value of applications received for the latest auction?
A: The total value of applications received is S$17.4 billion.
Q: What is the purpose of the new government securities issuance?
A: The new issuance is to raise the government’s issuance limit to S$1.515 trillion from S$1.065 trillion previously, with more than 60% of the increase going towards Special Singapore Government Securities to meet the investment needs of the Central Provident Fund.
