Bye bye negative rates

A new clause was sighted in the latest SOR repricing letter from my bank stating that SOR/SIBOR will be capped at 0% even if it falls below. By now, all banks should have already put in place such logic in their interest calculation program. So i guess this goes down in history as the one and only time when banks in Singapore charged an interest that is lower than their “margin” for SOR/SIBOR pegged loans. In fact, banks are pulling out from SOR pegged loans since the use of SOR is cited as being “clearly inappropriate and unsustainable under the current market conditions”.

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