MAS further extends US$60b swap facility with US Fed through December

SINGAPORE (THE BUSINESS TIMES) – The Monetary Authority of Singapore (MAS) has again extended its US$60 billion (S$80.1 billion) swap arrangement with the United States Federal Reserve, through Dec 31 this year.

The MAS USD Facility will also be extended till then, offering up to US$60 billion of backstop funding to banks to support US dollar (USD) lending to businesses in Singapore and the region, the regulator said in a statement on Thursday.

The US$60 billion swap facility was first established with the Fed in March last year. It was announced in end-July that both the swap facility and the MAS USD Facility will be extended through March 31 this year.

Last December, MAS further extended both arrangements through Sept 30.

Since its launch, the MAS USD Facility has provided about US$25 billion to banks for use in Singapore and the region. The extension of the facility will continue to promote stability in USD funding conditions, said MAS.

As an international financial centre, Singapore plays a key role in intermediating cross-border USD funding within Asia.

The Fed’s network of USD swap facilities with 14 central banks, including MAS, has provided a “critical backstop” for USD funding needs globally, and contributed significantly to central banks’ efforts to maintain stability and smooth functioning of financial markets during the pandemic.

MAS said these liquidity backstops continue to play an important role in supporting stable global USD funding conditions, given the certainty provided to market participants that USD funding will remain available to meet their needs.

It further said it has maintained ample 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 economic recovery in Singapore and the region.

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