The Monetary Authority of Singapore has announced the further extension of the US$60 billion swap arrangement with the US Federal Reserve through Dec 31 2021.
The MAS USD Facility will also be extended to the same date, offering up to US$60 billion of backstop funding to banks to support USD lending to businesses in Singapore and the region.
According to MAS, the US Fed’s network of USD swap facilities, set up with 14 central banks, has provided a critical backstop of USD funding needs globally, and “contributes significantly to efforts to maintain stability and smooth functioning of financial markets during the Covid-19 pandemic.”
See also: MAS warns against buy now, pay later services as more Gen Z Singaporeans turn to borrowings
As an international financial centre, Singapore plays a key role in intermediating cross-border USD funding within Asia.
The MAS USD Facility was introduced in March 2020, when global markets crashed because of the worsening pandemic. Since then, it has provided about US$25 billion to banks, for use in Singapore and the region.
MAS’s ability to maintain ample SGD and USD liquidity in the banking system through daily market operations complements their MAS USD Facility, and enables banks to continue supporting the economic recovery in Singapore and the region, says MAS.
