The Monetary Authority of Singapore (MAS) says it will provide up to RMB25 billion ($5.11 billion) of funding to banks in Singapore in a bid to deepen RMB liquidity.
The move will also further strengthen the banks’ abilities to meet the growing RMB business needs of their consumers in Singapore and the region.
Under the new initiative, RMB funding of up to three months will be channelled to the primary dealers (PDs) through MAS’s money market operations.
The funds provided will enhance the PDs’ credit intermediation capabilities and the overall RMB liquidity in Singapore.
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With the introduction of the new initiative, MAS says it will discontinue the RMB5 billion MAS Overnight RMB Liquidity Facility from Nov 23.
The MAS RMB Facility still remains in operation and will continue to provide additional term funding when necessary.
The MAS Overnight RMB Liquidity Facility and the MAS RMB Facility were previously established by MAS to support the development of the offshore RMB market in Singapore.