SOR has been on the rise, probably in tandem with Libor as well as USD/SGD exchange rates, while SIBOR continues to hold still at 0.69%. This highlights the difference between market vs. policy driven interest rates. In the past few days however, money market rates have fallen ahead of the US Fed meeting as they anticipate moves to keep borrowing costs low and spur lending.
Meanwhile, in the midst of supposed signs of rebound, the level-headed Jim Rogers gave warnings on impending inflation as “governments worldwide are printing money to prop up economies at a time when commodities supply is under pressure”.
Hi, Why does SOR rises when
Hi,
Why does SOR rises when USD rises against SGD?
Submitted by Anonymous
on Mon, 03/23/2009 - 18:46
SOR is calculated based on
SOR is calculated based on simulating what it costs to borrow the loan amount (in SGD) in USD instead. A simple way to think of it is this: at the end of the loan period, the loan amount plus interest will have to be paid, in USD. If the USD/SGD exchange rate goes up, then it will take more SGD to pay up the loan, thus it increases the overall cost of the loan. This is factored into the SOR, thus it becomes higher.
Submitted by yenkai
on Mon, 04/06/2009 - 11:25