Photo: cryptolinenews.com

On Thursday (19 March) night, the set-up of US$60 billion (S$87.16 billion) swap facility with the US Federal Reserve was announced by the Monetary Authority of Singapore (MAS) in order to lighten the impact on businesses in the midst of the outbreak.

According to MAS, it will draw on the swap facility to provide US-dollar liquidity to financial institutions in the country. The swap facility will be available for at least six months.

MAS said in a statement: “The swap facility complements MAS’ management of the Singapore-dollar market. Through its market operations, MAS will continue to provide ample Singapore-dollar liquidity to support the needs of the banking system.”

All eligible banks can borrow or deposit Singapore-dollar funds against specified collateral at this MAS standing facility.

On Sunday (15 March), the enhancement of the standing US-dollar liquidity swap line arrangements had been announced by six central banks, including the Fed with the aim of reducing the stress on global US-dollar funding markets.

Since then, nine additional central banks have been included by the Fed in the US-dollar liquidity swap line arrangements, with MAS being one of them.

MAS explained that “the swap line arrangements will contribute significantly to ensuring stable liquidity conditions in the US-dollar funding markets in Singapore and globally.”

The operationalisation of the facility will be done in consultation with the Fed, MAS added and more information on its implementation in the country will be issued next week.

MAS concluded that “these measures will reinforce the stability of the financial system in Singapore and support its role in providing credit and essential financial services to the economy.”

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