MAS unveils US$60b swap facility with US Fed

THE Monetary Authority of Singapore (MAS) on Thursday night announced a US$60 billion swap facility with the US Federal Reserve to ease the strain on businesses amid the virus fallout.

MAS said it intends to draw on this swap facility - which will be in place for at least six months - to provide US-dollar liquidity to financial institutions in Singapore.

"The swap facility complements MAS' management of the Singapore-dollar market. Through its market operations, MAS will continue to provide ample Singapore-dollar liquidity tosupport the needs of the banking system," said the regulator in a statement. 

The MAS standing facility will also be available for all eligible banks to deposit or borrow Singapore-dollar funds against specified collateral.

On March 15, six central banks - including the Fed - had announced the enhancement of the standing US-dollar liquidity swap line arrangements to ease strains in global US-dollar funding markets.

The Fed has since extended the US-dollar liquidity swap line arrangements to nine additional central banks, including MAS. 

"The swap line arrangements will contribute significantly to ensuring stable liquidity conditions in the US-dollar funding markets in Singapore and globally," said MAS.

The Singapore regulator added that it will work out the operationalisation of the facility in consultation with the Fed. More details on its implementation in Singapore will be provided next week. 

"These measures will reinforce the stability of the financial system in Singapore and support its role in providing credit and essential financial services to the economy," said MAS.