SINGAPORE – The Monetary Authority of Singapore (MAS) said on Thursday (March 26) it will draw on its new currency swap line with the US Federal Reserve to provide up to US$60 billion (S$86.8 billion) of US dollar (USD) funding to banks in Singapore.
The swap line was announced last week as part of coordinated central bank actions to alleviate the surge in demand for US dollars from the impact of the coronavirus outbreak.
MAS said the new funding for banks will support more stable USD funding conditions in Singapore, and facilitate USD lending to businesses here and the region. It will also contribute to global efforts by central banks to maintain stability and normal functioning of financial markets.
MAS will lend the USD obtained from the US central bank to banks in Singapore through its new MAS USD Facility, via auctions.
In the first auction, which will take place on Friday, March 27, US$10 billion in seven-day funds will be offered, which will cater to increased end-of-quarter demand for USD during this period.
MAS will conduct another two auctions on Monday, March 30, where US$12 billion in seven-day funds and US$8 billion in 84-day funds will be offered. After this, regular weekly auctions will be conducted every Monday.
Details on the auction schedule, as well as the terms and conditions for the facility can be found on the MAS website.
MAS said that it will continue to maintain a high level of Singapore dollar (SGD) and USD liquidity in the banking system through its daily money market operations.
“The MAS USD Facility complements and reinforces what MAS has been doing to ensure that funding to banks in Singapore remains ample so that they can play their role in providing credit to businesses and individuals,” said MAS in its statement.
It also urged banks in Singapore to avail themselves of the liquidity facilities provided so that they can better meet the USD funding needs of their customers in Singapore and the region.
Source: Read Full Article