SINGAPORE: Singapore's central bank and the US Federal Reserve have extended a US$60 billion swap facility through to March 2021 to bolster US dollar lending to firms in the country and the region, the Monetary Authority of Singapore (MAS) said on Thursday (Jul 29).
The swap facility allows MAS to exchange Singapore dollars for US dollars, providing US dollar liquidity to financial institutions in Singapore.
The facility launched in March this year has already seen around US$22 billion provided to banks for use in Singapore and the region, MAS said in a media release.
The extension of the facility through Mar 31, 2021 will "anchor market confidence and reinforce the stability of the financial system in Singapore", the agency added.
"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," said MAS.
The Fed's swap arrangements with central banks globally has "provided a critical backstop" for funding and helped "maintain stability" of financial markets during the COVID-19 pandemic, added MAS.