MAS, Fed extend USD60 billion currency swap facility through Dec 31

SINGAPORE (CNA) – Singapore’s central bank said yesterday it has extended a USD60 billion swap arrangement with the United States (US) Federal Reserve through December 31.

The facility, set up in March 2020, was previously extended through September 30 this year.

The swap facility allows the Monetary Authority of Singapore (MAS) to exchange Singapore dollars for US dollars, providing US dollar liquidity to financial institutions in Singapore.

MAS said yesterday that the Fed’s network of swap facilities provides a “critical backstop” for US dollar funding needs globally, and has helped central banks maintain stability during the COVID-19 pandemic.

“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 said.

Apart from Singapore, the Fed has swap arrangements with 13 central banks around the world, including Australia, Brazil, South Korea, Mexico, Sweden, Denmark, Norway and New Zealand.

The MAS USD Facility has also been extended to December 31. The facility offers up to USD60 billion of backstop funding to banks to support US dollar lending to businesses in Singapore and the region.

Since its launch in March last year, the facility has provided about USD25 billion to banks.

“As an international financial centre, Singapore plays a key role in intermediating cross-border USD funding within Asia,” said the central bank. “MAS has maintained ample SGD and USD liquidity in the banking system through its daily market operations. This complements the MAS USD Facility, and enables our banks to continue to support the economic recovery in Singapore and the region.”

A view of the Monetary Authority of Singapore’s headquarters in Singapore. PHOTO: CNA