The Singapore Overnight Rate Average (SORA) is the volume-weighted average rate of borrowing transactions in the unsecured overnight interbank SGD cash market in Singapore between 8am and 6.15pm.
What are some of the benefits of SORA?
- It is a robust benchmark underpinned by a deep and liquid overnight interbank funding market.
- It has been published by MAS since 1 July 2005. The availability of a long historical time series allows market participants to perform technical analysis and model trends for risk management, asset-liability pricing, and trading purposes.
- The market convention for the use of overnight interest rates such as SORA is to reference its compounded average. Compounded SORA rates are significantly more stable compared to forward-looking term rates (e.g. SOR) which are exposed to idiosyncratic market factors on a single day’s fixing, such as quarter/year-end volatility.