Now that the dust has settled, many of us are wondering what will happen to Singapore SIBOR rates after the MAS SIBOR investigation? Will it go up? Will it be obsolete?
Outcome of MAS SIBOR investigation
We learnt that 20 banks were reprimanded and most are fined. Some traders have resigned, fired or waiting to be disciplined. The investigation found out that hundreds of attempts were made to manipulate SIBOR rates. However, there was no conclusive evidence to suggest that manipulation was successful. The practise of conducting surveys to set SIBOR rates will remain although it will be subjected to more reviews and enhancements of the process.
Will SIBOR go up or down?
Perhaps this is the most burning question on everyone’s mind for folks like you and me. Association of Banks (ABS) is quoted “customers with mortgages pegged to SGD SIBOR will not face increased borrowing costs.”. ABS has also backtested historical data due to the inappropriate conduct of the traders and we would not have faced any impact on SIBOR rates. In addition, they responded that no increment on SIBOR is expected with the new changes.
Let’s now look at 1M SIBOR and 3M SIBOR rates before and after this announcement.
1M SIBOR has remained the same from 12 June 2013 to 18 June 2013. For the same period, 3M SIBOR increased by a mere 0.22% on 13 June 2013 and has not moved since. You can also view the Singapore Sibor Rate history along with the latest SIBOR and SOR rates on our 2017 Sibor Rates page.
We think that the changes would make the process to set SIBOR rates better and transparent. The reviews and governance mechanisms should also assure us that the authorities is watching the process. To compare home loan rates of SIBOR packages, check out our updated home loan calculator.
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