The Monetary Authority of Singapore (MAS) said its current policy settings are appropriate, and domestic money markets are functioning in "an orderly manner".
The central bank added it has had "no need to undertake any extraordinary measures".
The SOR went negative a week ago.
SOR is an interest rate against which many corporate and mortgage loans are benchmarked.
Part of the downward pressure on the SOR has come from higher capital inflows.
The MAS said it also reflects "market expectations of the exchange rate".
The MAS noted that some investors had sought the safety of short term cash deposits because of the turmoil in global markets.
The MAS said its policy stance remains as that announced in its April 2011 statement. In April, the central bank effectively allowed the Singapore dollar to appreciate against a basket of currencies by re-centering the currency's band upwards.
The next MAS policy statement is due in mid-October.
Analysts said the negative SOR reading may mean banks will have to alter the way they are lending money.
Song Seng Wun, regional economist at CIMB Research, said: "....the banks are going to say 'oh look, what we used to price mortgage loans is now not applicable, we may have to switch to an alternative rate'....based on the Singapore Inter Bank Offer Rate (SIBOR), for instance, which is much more practical, because at least it is still in positive territory although it is still rather low at this point."
Source: Channel News Asia
Short of sounding like a broken record, the wife and I will much rather the banks "calling a spade a spade" on the switchover to SIBOR, rather than taking the supposed moral grounds such as:
• "Meeting customers’ demand for a less volatile reference rate" - So SOR is only considered "more volatile" after it had gone negative?
• "Due to their inherent volatility and the long-term nature of mortgage loans, SOR-pegged products are deemed unsuitable for borrowers who buy residential property for owner occupation" - If this is the case, shouldn't the bank not offer such loan packages to private home buyers in the first place?