The essential reason behind why the yield curve is so flat for Singapore is because of the political stability of Singapore and the strong ability of Singapore to repay it's debt.
First, the idea that Singapore's yield curve is flat. I wouldn't call Singapore's yield curve super flat though - though I understand the 30 year bond yield of 2.549% is not too much higher than the 1 month treasury bill yield of 1.974%, compared to the 1.4% difference between the 1 month bill of India and it's 30 year bond. However if you compared the % difference between the interest rates, you will find that Singapore's 30 year yield rate is 29.13% more than it's own 1 month, and India's is 22.41% more. Singapore's 30 year bond actually provides a higher yield difference relative to it's own 1 month! I took these information from these particular websites: http://www.worldgovernmentbonds.com/country/india/ http://www.worldgovernmentbonds.com/country/sin...
Secondly, the reason why our Singapore bond yields are so low. Bond yields are based upon the same idea of demand and supply, where demand is governed by the riskiness of the investment, through factors such as default, interest rate volatility, Currency Depreciation etc. Singapore's credit rating is AAA, and is one of the countries with the safest gov bonds because of the fact that Singapore has budget surpluses and does really prudent spending. Not only that, Singapore's interest rates have been rather stable, we have a politically stable climate, and the currency is expected to remain strong with Singapore being a financial hub and trading port and all. All these factors contribute to the fact that Singapore's yield's don't have to be high for people to buy into them because they are so safe.
These are some reasons from a non-exhaustive list of why our bond yields are low relative to other countries. But if you compare to a developed country, our yields aren't too bad actually. We trade 0.2~0.3% for an arguably much more stable and default free government.
The essential reason behind why the yield curve is so flat for Singapore is because of the political stability of Singapore and the strong ability of Singapore to repay it's debt.
First, the idea that Singapore's yield curve is flat. I wouldn't call Singapore's yield curve super flat though - though I understand the 30 year bond yield of 2.549% is not too much higher than the 1 month treasury bill yield of 1.974%, compared to the 1.4% difference between the 1 month bill of India and it's 30 year bond. However if you compared the % difference between the interest rates, you will find that Singapore's 30 year yield rate is 29.13% more than it's own 1 month, and India's is 22.41% more. Singapore's 30 year bond actually provides a higher yield difference relative to it's own 1 month! I took these information from these particular websites: http://www.worldgovernmentbonds.com/country/india/ http://www.worldgovernmentbonds.com/country/sin...
Secondly, the reason why our Singapore bond yields are so low. Bond yields are based upon the same idea of demand and supply, where demand is governed by the riskiness of the investment, through factors such as default, interest rate volatility, Currency Depreciation etc. Singapore's credit rating is AAA, and is one of the countries with the safest gov bonds because of the fact that Singapore has budget surpluses and does really prudent spending. Not only that, Singapore's interest rates have been rather stable, we have a politically stable climate, and the currency is expected to remain strong with Singapore being a financial hub and trading port and all. All these factors contribute to the fact that Singapore's yield's don't have to be high for people to buy into them because they are so safe.
These are some reasons from a non-exhaustive list of why our bond yields are low relative to other countries. But if you compare to a developed country, our yields aren't too bad actually. We trade 0.2~0.3% for an arguably much more stable and default free government.