Singapore rates plunge as currency tests top limit

Reuters
11 Jan 2008

SINGAPORE, Jan 11 - Singapore's money market rates and bond yields have plunged at the start of the year, which analysts say is evidence that the central bank is intervening heavily to cap its rising currency.

Three-month rates in the interbank market hit a 2-year low of 1.75 percent on Friday, a sharp drop from levels close to 2.4 percent at the start of 2008.

Likewise, 5-year bond yields have fallen 50 basis points to 1.8 percent over the past 10 days. Simultaneously, the Singapore dollar has gained 0.7 percent during the same period and hit a decade high of $1.4264 on Friday against a broadly weak U.S. dollar.

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