MAS establishes $60 billion swap facility with US Federal Reserve

The Monetary Authority of Singapore (MAS) announced the establishment of a $60 billion swap facility with the US Federal Reserve (Federal Reserve).

Financial markets globally came under strain in reaction to the now widespread COVID-19 outbreak. On 15 March 2020, six central banks, including the Federal Reserve announced the enhancement of the standing US Dollar (USD) liquidity swap line arrangements to ease strains in the global USD funding markets. 

The Federal Reserve now extended the USD liquidity swap line arrangements to nine additional central banks, including MAS. The swap line arrangements will contribute significantly to ensure stable liquidity conditions in the USD funding markets in Singapore and globally.

MAS 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 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.

Re-disseminated by The Asian Banker

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