Singapore Interbank Offered Rate
From Financial Literacy Wiki
SIBOR is short for Singapore Interbank Offered Rate. This term is usually found in your mortgage loan statement where it is usually used to determine your mortgage rates.
SIBOR is the rate at which banks lend to one another. When it falls, loans that are SIBOR-linked will fall as well. SIBOR also gives a rough indication of where deposit and savings account rates at banks might be headed, as it is influenced partly by the supply and demand for funds in the Singapore interbank market.
When SIBOR rate is low, because foreign banks have low deposit base than local ones, the foreign banks is most likely to borrow funds from the interbank market for their lending activities, in turn reducing their activities to attract savings deposits.
SIBOR are usually quoted for different periods, one-month, three-months and even 12-months. They are usually used to set fixed or variable rates for home loans.
The three-months SIBOR bear some significance for depositors, as it is a benchmark rate used by banks to adjust their deposit rates. By monitoring it, you can get an indication of where banks are headed next with their fixed deposit and savings account rates.
