The Monetary Authority of Singapore (MAS) has announced an extension of its US$60 billion ($82.55 billion) swap arrangement via its USD Facility with the US Federal Reserve till 31 March 2021.

MAS’s USD Facility will offer up to US$60 billion of funding to banks, to facilitate USD lending to businesses in Singapore and the region.

In a July 30 release, MAS said the Federal Reserve’s network of USD swap facilities with 14 central banks, including the MAS, has provided a critical backstop for USD funding needs globally, and contributed significantly to central banks’ efforts to maintain stability and normal functioning of financial markets during this COVID-19 pandemic.

These swap facilities will help sustain recent improvements in global USD funding markets, and provide certainty to market participants that USD funding will remain available to meet their needs.

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

It revealed since its launch in March 2020, the MAS USD Facility has provided about US$22 billion to banks, for use in Singapore and the region. As such, the extension of the MAS USD Facility will anchor market confidence and reinforce the stability of the financial system in Singapore.

MAS reassured that it maintains a high level of SGD and USD liquidity in the banking system through its daily market operations. This complements the MAS USD Facility, and ensures that funding to banks remains ample so that they can maintain the flow of credit to businesses and individuals in Singapore and the region amid the COVID-19 pandemic.