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MAS Extending US$60 Billion Swap Facility With US Fed

  • The Monetary Authority Singapore will extend a US$60 billion swap facility with the US Federal Reserve to facilitate its US dollar lending to Singapore companies and the region in the midst of the coronavirus pandemic.
  • Both the swap line and MAS USD Facility have been extended to end-March next year.
  • MAS USD Facility has given about US$ 22 billion to banks for use in Singapore and the region since its launch, MAS said yesterday.
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The Monetary Authority Singapore will extend a US$60 billion swap facility with the US Federal Reserve to facilitate its US dollar lending to Singapore companies and the region in the midst of the coronavirus pandemic.

The swap line was set up on March 19 to let the MAS exchange Singapore currency for US dollars with the US central bank. On the back of this, the MAS established the MAS USD Facility on March 26 to lend US dollars to banks in Singapore. Both the swap line and MAS USD Facility have been extended to end-March next year.

MAS USD Facility has given about US$ 22 billion to banks for use in Singapore and the region since its launch, MAS said yesterday. As an international financial hub, Singapore plays a crucial role in the intermediation of cross-border US dollar funding within Asia.

The facility extension will anchor market confidence and strengthen the stability of the financial system in Singapore, MAS said.

The pandemic has brought financial markets under pressure as travel bans and lockdowns hit economies around the world.

The Fed’s network of swap facilities with 14 central banks, including the MAS, has established a crucial backstop for global US dollar financing needs and has led to efforts by central banks to sustain financial market stability.

Such swap facilities will help support recent developments in global US dollar funding markets and provide market participants with the assurance that US dollar funding will continue to be available to meet their needs, MAS said.

MAS said through its day-to-day market operations that it has managed to maintain a high degree of Singapore Dollar and US Dollar liquidity in the banking system. It complements the MAS USD Facility and guarantees that there is enough funding for banks to continue the credit flow to companies and individuals in Singapore and the region.

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[The Straits Times]

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