Singapore's central bank is expected to scrap its U.S. dollar-linked interbank lending rate, according to a banker with knowledge of regulators' reviews into the setting of interest rates following the Libor rate rigging scandal.
The Monetary Authority of Singapore ordered members of the Association of Banks in Singapore in July to review how they set their benchmark interbank lending rates, focusing on the Singapore interbank offer rate (Sibor) and the Swap Offer Rate (SOR).
The order came after U.S. and UK authorities uncovered widespread manipulation of the London interbank lending rate (Libor).
U.S. dollar Sibor is a measure of the cost of borrowing U.S. dollars in the Singapore interbank market, and is used to price loans made by Singapore banks in U.S. dollars. Banks can use alternatives, like the U.S. dollar Libor rate.
The more significant market in Singapore is the Singapore dollar Sibor, which is used as the reference price for many commercial and home loans in the city-state.
The MAS probe was extended in late September when the regulator said banks must also look at how rates for non-deliverable foreign exchange forwards are set.
The changes are expected to be formalised by June and the outcome likely to affect housing interest rate.
The Monetary Authority of Singapore ordered members of the Association of Banks in Singapore in July to review how they set their benchmark interbank lending rates, focusing on the Singapore interbank offer rate (Sibor) and the Swap Offer Rate (SOR).
The order came after U.S. and UK authorities uncovered widespread manipulation of the London interbank lending rate (Libor).
U.S. dollar Sibor is a measure of the cost of borrowing U.S. dollars in the Singapore interbank market, and is used to price loans made by Singapore banks in U.S. dollars. Banks can use alternatives, like the U.S. dollar Libor rate.
The more significant market in Singapore is the Singapore dollar Sibor, which is used as the reference price for many commercial and home loans in the city-state.
The MAS probe was extended in late September when the regulator said banks must also look at how rates for non-deliverable foreign exchange forwards are set.
The changes are expected to be formalised by June and the outcome likely to affect housing interest rate.
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