“Domestic funding demand and the expectation that the US Federal Reserve will start their rate normalisation this year will keep SORs supported into the end of the year,” he said.
UOB’s year end 3-month SOR is at 1.40 per cent, and Sibor is at 1.30 per cent. The bank’s year-end USD/SGD forecast is 1.40, Mr Yong said.
OCBC Bank’s Selena Ling said US Fed chair Janet Yellen is still reiterating that a liftoff later this year is likely, so the weak USD may not last past the summer.
Last Friday, Ms Yellen said she expects to hike interest rates “at some point this year”.
“We are still keeping our year-end 3-month Sibor 1.35 per cent forecast for now,” said Ms Ling.