SIBOR stands for Singapore Inter-bank Offered Rate. It is the average rate derived from the lending and borrowing rates between financial institutions, and announced by The Association of Banks in Singapore on daily basis. It is mainly affected by two factors, namely the US Fed interest rates and liquidity in Singapore banking sector. (Note: It is proposed that SIBOR to be phased out and replaced by SORA by 2024.)
What is SORA?
The Singapore Overnight Rate Average or SORA is the volume-weighted average rate of borrowing transactions in the unsecured overnight interbank SGD cash market in Singapore between 8.00am and 6.15pm. This benchmark rate is published on MAS website. Since 6 August 2020, MAS also publishes the Compounded SORA for 1-month, 3-month and 6-month tenures.
What is 3-Month Compounded SORA?
The 3-Month Compounded SORA (3M SORA) is computed by compounding the daily published SORA rate over the historical 3-month period. Currently, 3M SORA is referenced for mortgage loan as it is more stable.