The SIBOR to SORA transition largely involved the retail customers of banks, due to their usage in retail mortgage loans. Prior to the transition, the SC-STS conducted a public education campaign to provide retail customers with information on the transition and options that would best meet their needs, leading to over half of SIBOR retail loans being actively transitioned out of SIBOR, with the remaining 40,000 loans undergoing automatic conversion in October 2024 to reference the SORA.
Along with the SOR to SORA transition on June 30, 2023, the completion of the SIBOR to SORA transition marks the conclusion of the overall SOR and SIBOR interest rate benchmark transition exercise that first began in 2019.
According to the SC-STS, SORA, derived from actual overnight interbank lending transactions in Singapore, is a more robust and transparent benchmark than SOR and SIBOR.
It is widely adopted by financial institutions and borrowers, and the SORA market has since grown to more than $3 trillion in outstanding derivatives, bonds, and loans, comparable to the size of the SOR and SIBOR market before the start of the transition exercise.
See also: Singapore bank bonds can stand tall in 2H2025 on flight to quality
At present, SORA is now the de-facto standard for Singapore dollar loan products, with the SC-STS having achieved its goal since the start of the transition process in 2019.
The move was part of the global benchmarks’ reforms to transition away from interbank offered rate (IBOR) benchmarks, which were previously based on non-binding quotes by banks, to more robust overnight interest rate benchmarks based on actual transactions.
Han Kwee Juan, co-chair of SC-STS, says: “The transition from SOR and SIBOR to SORA was a challenging one, especially given the number of outstanding legacy contracts. I am heartened to see that the SC-STS and the industry was able to come together and play an instrumental role to complete the transition. SORA has been well-adopted by market participants, and is widely used across derivatives, loans, and bonds. Customers are also now more familiar with and have confidence in SORA-based products.”
See also: Bank of Singapore launches new asset allocation framework amid heightened global market volatility
Han is also the group head of Institutional Banking (IBG) at DBS Group Holdings.
“The successful completion of the transition is the result of close collaboration across the financial industry,” adds Leong Sing Chiong, Monetary Authority of Singapore’s (MAS) deputy managing director, and co-chair of SC-STS. “The shift towards a more transparent and robust benchmark will enhance trust and confidence for everyone that uses SGD interest rates, and strengthen the resilience of the SGD market.”
