How Do The Floating Loan Rates Look ?
Fed’s dovish stance yesterday led to some expectation adjustments in Libor rates and SGD rates followed suit today.
The short end interest rates that we rely upon for fixing those housing loans as implied by the interest rate curves are as follows.
I am unable to project SGD SIBOR that most of our loans are pegged against because the long end SIBOR curve is unreliably wide and hardly trades.
Instead I stripped the 6 months interest rates from the SOR curve which is a best approximation we can get, to a huge flaw.
It looks like we should be expecting big changes end next year when short end rates will go above 1% which also means we should be expecting higher fixed deposit rates as well.