Companies & Markets

MAS to further extend US$60b swap facility with US Federal Reserve

Published Thu, Dec 17, 2020 · 03:08 AM

THE Monetary Authority of Singapore (MAS) will again extend its US$60 billion swap arrangement with the US Federal Reserve through Sept 30, 2021. In turn, the MAS USD Facility will also be extended till then, offering up to US$60 billion of funding to banks, to facilitate lending to businesses in Singapore and the region.

The Fed's network of USD (US dollar) swap facilities with 14 central banks, including the MAS, has provided a "critical backstop" for USD funding needs globally, said Singapore's central bank in a statement. It has contributed significantly to central banks' efforts to maintain stability and normal functioning of financial markets during the Covid-19 pandemic, reinforcing the improvements in global USD funding conditions and providing certainty to market participants that USD funding will remain available, added MAS.

With Singapore as an international financial centre, it plays a key role in intermediating cross-border USD funding within Asia. Since its launch in March 2020, the MAS USD Facility has provided about US$23 billion to banks, for use in Singapore and the region. The extension of the MAS USD Facility will continue to promote stability in USD funding conditions and anchor market confidence, said the central bank.

MAS said that it has been maintaining ample SGD (Singapore dollar) and USD liquidity in the banking system through its daily market operations. This complements the MAS USD Facility, and enables banks here to continue to support the needs of businesses and individuals in Singapore and the region amid the pandemic.

MAS first established the US$60 billion swap facility with the Fed on March 19, 2020. On the back of this swap facility, MAS established the MAS USD Facility on March 26, 2020 to lend USD to banks in Singapore. It was announced in end-July that both the swap facility and the MAS USD Facility will be extended through March 31, 2021.