The monetary authority of Singapore announced several plans to support the adoption of Singapore dollar overnight interest rate in the market

Lianhe Zaobao reported on August 6 that the monetary authority of Singapore (MAS) announced a number of plans to support the adoption of the Singapore dollar overnight interest rate (Sora), including the monthly issuance of floating rate notes based on the Singapore dollar overnight interest rate and improving the transparency of the Singapore dollar overnight interest rate.

The Singapore dollar overnight interest rate is the data of the HKMA administration. In view of the fact that the Singapore dollar overnight interest rate has become an increasingly important benchmark interest rate indicator in the Singapore dollar financial market, the HKMA has launched these plans to promote the activities of the Singapore dollar overnight interest rate market, ensure the integrity of this indicator and enhance the market's confidence in the Singapore dollar overnight interest rate.

The HKMA's report points out that these plans will complement the industry led transition blueprint, which is formulated by the Steering Committee (sc-sts) established to supervise the transition from new dollar swap rate (SOR) to new dollar overnight interest rate, so as to develop an active and strong new dollar overnight interest rate market. The Singapore dollar overnight interest rate will gradually replace the Singapore dollar interbank offered rate (SIBOR) as the benchmark interest rate in the local financial market within three to four years.

With regard to the monthly plan to issue floating rate notes based on the Singapore dollar overnight interest rate, the HKMA pointed out in its statement yesterday that it will start issuing this note on August 21. This will expand the HKMA's portfolio of money market instruments used to manage the liquidity of the banking system. The issuance of this note will also facilitate the promotion of Singapore dollar overnight interest rate as a benchmark index of floating interest rate, provide a reference price for Singapore dollar overnight interest rate cash products, and stimulate hedging activities through Singapore dollar overnight interest rate derivatives.