This was aimed at easing strains in the global USD funding markets.
On March 19, the Federal Reserve extended the USD liquidity swap line arrangements to nine additional central banks, including the MAS.
MAS says the swap line arrangements will “contribute significantly” to ensuring stable liquidity conditions in the USD funding markets in Singapore and globally.
The Singapore central bank says it intends to draw on this swap facility, which will be in place for at least six months, to provide USD liquidity to financial institutions in Singapore.
MAS will work out the operationalisation of the facility in consultation with the Federal Reserve, and will provide details next week on how it will be implemented in Singapore.
The swap facility complements MAS’ management of the Singapore Dollar (SGD) market. Through its market operations, MAS will continue to provide ample SGD liquidity to support the needs of the banking system.
In addition, the MAS Standing Facility is available for all eligible banks to deposit or borrow SGD funds against specified collateral.
“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,” MAS says in a statement.
