Sibor crumbles under domestic liquidity pressures, tumbles to 0.871%

It is the lowest for the year.

Cracking under the pressures by domestic liquidity, three-month Singapore interbank offered rate (Sibor) fell down at its lowest for the year.

According to DBS, Sibor fell to 0.87067% on Thursday from 0.87242% the day before.

"Although the decline is small, it is significant because the sticky three-month Sibor, which is used to price home loans, had barely moved in the past few months," the report said.

MoneySmart defines Sibor as a reference rate based on the interest rates used by banks in Singapore when lending unsecured funds to each other.

"Simply put, the SIBOR reflects how much it would cost banks to borrow from each other," it said.

Meanwhile, DBS added that the more volatile three-month swap offer rate (SOR), which is used to price corporate loans, has been on a general downward trend for a few months.

SOR, the rate used to price corporate loans, has been weakening since early June.