This follows a joint industry report published today announcing the discontinuation of the remaining Singapore Interbank Offer Rate (SIBOR) tenors in phases over the next four years.
The mandate of the Steering Committee for SOR Transition to SORA will be expanded to enable it to oversee the interest rate benchmark transition from SIBOR to the Singapore Overnight Rate Average (SORA), the Monetary Authority of Singapore (MAS) announced on Friday.
The committee, which comprises senior representatives from key banks in Singapore, relevant industry associations, and MAS, will be renamed the Steering Committee for SOR & SIBOR Transition to SORA.
In its expanded role, the committee will also be responsible for providing strategic direction on SIBOR transition to SORA, and oversee its smooth implementation, the announcement said.
More Transparent Loan Market
SIBOR and SOR are forward-looking term rates charged between banks for 1-month, 3-month, or 6-month placements and borrowings. In contrast, SORA is a backward-looking overnight rate used in the inter-bank market on cash placements for one day only that carries almost no credit risk premium and no term premium. In contrast,
The SORA-centered approach is aligned with the development that risk-free rates are being used across the global markets as new benchmark rates for financial markets.
The joint industry report published today includes responses to the feedback received on the discontinuation of SIBOR, noting strong support from bank and non-bank respondents, and setting out the key timelines for SIBOR discontinuation by end-2024.
