Singapore Interest Rates Remain Stable Despite Rising US Bond Yields
What does this mean for Singapore businesses and borrowers?
Interest rates in Singapore have remained relatively stable, even as borrowing costs in the US continue to face pressure from rising bond yields.
According to the Monetary Authority of Singapore (MAS), Singapore’s 3-month compounded SORA, a benchmark used for many local loans, stood at around 1.2%. This is lower than its 10-year average of 1.5%.
Meanwhile, the yield on 10-year Singapore Government Securities stood at around 2.5%, slightly higher than its 10-year average of 2.2%.
Speaking in Parliament on 7 October, Minister for National Development and MAS Deputy Chairman Chee Hong Tat said Singapore’s strong financial position has helped keep borrowing costs relatively stable.
MAS also noted that banks remain financially strong and businesses are generally in a sound position to manage higher borrowing costs.
But with global interest rates still uncertain, there are a few things borrowers should take note of.
1. Will Rising US Interest Rates Affect Singapore?
The US has a big influence on global financial markets. When US bond yields rise, borrowing costs in other countries may also be affected.
Singapore is no exception.
If global interest rates continue to rise, local borrowing costs could also come under pressure. However, the impact will depend on the type of loan and the lender.
For businesses planning to take up new loans, it is worth looking beyond the interest rate offered today. Make sure the business can still manage the monthly repayments if borrowing costs increase.
2. Government Support for SMEs
There is some good news for Singapore businesses.
In September 2026, the government’s risk-sharing portion for eligible Enterprise Financing Scheme (EFS) loans increased from 50% to 70%, subject to the scheme’s terms and conditions.
The scheme helps eligible businesses access financing for needs such as working capital and project expenses.
With the government sharing more of the lending risk, eligible businesses may have better access to financing.
However, this does not mean every application will be approved. Banks and participating financial institutions will still assess the business’s financial position and ability to repay.
3. How Will This Affect Banks and Property Investments?
Higher bond yields do not always mean banks will earn more money.
Banks also need to consider their deposit costs, loan interest rates and other sources of income. These factors can affect their profits.
For REITs, or real estate investment trusts, higher borrowing costs could become a concern when existing loans need to be renewed or refinanced.
If financing becomes more expensive, some REITs may face higher expenses, which could affect the amount of income they pay to investors.
This is why investors are keeping an eye on interest rates and the cost of borrowing.
4. What Should Business Owners Take Note Of?
For now, Singapore’s borrowing environment remains relatively stable. But things can change as global markets move.
If you are running a business, here are a few things worth looking at:
Review your existing loans. Know how much you are paying every month and when your loans are due.
Keep an eye on cash flow. Make sure your business has enough cash to cover operating expenses and loan repayments.
Plan your financing early. If you need money for expansion or working capital, do not wait until the last minute.
Look beyond interest rates. Consider the total borrowing cost, repayment period and whether the loan suits your business needs.
At the end of the day, getting a loan is not just about finding the lowest interest rate. You also need to make sure your business can afford it.
Our Take
Singapore’s borrowing costs remain stable for now, but business owners should not assume they will stay this way.
If you are planning to borrow, expand or refinance, it is worth reviewing your financial position early.
The key is simple: know where your business stands before you need the money.
