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Singapore interest rates could bottom out in Q2 of 2026: UOB

The Straits Times

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January 08, 2026

Sora could level out around 1% before heading towards 1.39% by year end

- Sheila Chiang Business Correspondent

Singapore interest rates could bottom out in Q2 of 2026: UOB

The Singapore Overnight Rate Average, or Sora, is expected to stabilise at a time when growth in the Singapore economy is also forecast to moderate after a strong year in 2025.

(ST PHOTO: LIM YAOHUI)

Interest rates in Singapore could bottom out in the second quarter of 2026 as the US Federal Reserve cuts rates, shortening the wait for hedging opportunities.

The Singapore Overnight Rate Average, or Sora, is the Republic's key interest rate benchmark and reflects the average rate of unsecured overnight interbank Sing-dollar borrowing. For consumers, it influences how much interest they pay on home loans and other bank borrowings.

"If you are looking to hedge interest rates, the timeframe to be looking at it is the first and second quarter of 2026. We are not so far away from the low," said UOB senior foreign exchange strategist Peter Chia.

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