Sibor

Being a STM gal, I'd better jot down whatever things that i read, heard and learnt.

1. Singapore interbank offered rate (Sibor) is the interest rate at which banks lend excess funds to one another, which influences comsumer (and business) loan and deposit rates.

2. Unlike local banks, foreign ones do not have a large pool of cheap deposit to fall back on and normally tap the interbank market for funds to make loans.

3. As their cost of funds falls, foreign banks can afford to dangle more attractive loan rates to borrowers.

4. The attractive loan rates is influenced not only by interbank rates, but also by other factors such as a bank's competitive strategy. If the 'first mover' bank start cutting loan rates, the competitors are likely to follow suit.

5. In term of interest rate, mortgage rates tend to lag behind deposit rates and interbank rates by a few months.

6. For bank to aim being the leading player in the market, they will not play the market share game for the sake of grabbing market share.

Even though i learnt about Sibor while negotiating for bank facility at my previous company 1.5 years ago, i've already forgotten now. Thus, the need to jot it down for easy reference, which i strongly believe i will come to this term again.

Now, me wondering about the derivative of the Sibor. Anybody knows?