MAS Announces Extension of the USD60 Billion Swap Facility with the US Federal Reserve

The Monetary Authority of Singapore (MAS) has announced that it will continue to provide US Dollar (USD) via the MAS USD Facility following the extension of MAS’ USD60 billion  swap arrangement with the US Federal Reserve (Federal Reserve) through 31 March 2021.

The MAS USD Facility will offer up to USD60 billion of funding to banks, to facilitate USD lending to businesses in Singapore and the region, the regulator said in a press release.

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, says MAS.

As an international financial centre, Singapore plays a key role in intermediating cross-border USD funding within Asia. Since its launch in March 2020, the MAS USD Facility has provided about USD22 billion to banks, for use in Singapore and the region. The extension of the MAS USD Facility through 31 March 2021 will anchor market confidence and reinforce the stability of the financial system in Singapore.

MAS has continued to maintain 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.