Looks like the days of low interest rates are here: the 6 month SOR has fallen to 1.16%, the lowest level since i started tracking. If interest rates remain subdued, i should expect more savings yet again when my home loan interest, which is pegged to the 3 month SOR, is due for revision again. The timing couldn’t have been better – i’ve managed to escape the spike in interest rates brought about by the worldwide credit crunch.
- Interbank rates have tumbled worldwide as central banks slashed interest rates
- The London interbank offered rate, or Libor, for three- month U.S. dollar loans, slid 15 basis points yesterday to 2.71 percent, the lowest level since June 9
- The European Central Bank and Bank of England will cut their key rates by 50 basis points
- Central banks in Australia, China, Hong Kong, India, Japan, South Korea, Taiwan and Vietnam all announced rate cuts since the start of last week
- A thawing in money markets is causing a rally in short-end rates, leaving the door open to further declines in the swap rates
However, banks may not pass all of the benefits of lower interest rates on to consumers and businesses.