SINGAPORE: The Monetary Authority of Singapore (MAS) announced on Thursday (Dec 17) that a US$60 billion swap facility arrangement with the US Federal Bank will be further extended through Sep 30, 2021 to facilitate US dollar lending to businesses in Singapore and the region.
The facility, which was launched in March this year, allows the central bank to exchange Singapore dollars for US dollars, providing US dollar liquidity to financial institutions in Singapore.
This is the second extension for the facility, after it was announced in July that it will be extended through March 2021.
The facility has already provided around US$23 billion to banks for use in Singapore and the region since its launch, MAS said in a media release.
"The extension of the MAS USD Facility will continue to promote stability in USD funding conditions and anchor market confidence," MAS added.
"MAS has been maintaining ample SGD and USD liquidity in the banking system through its daily market operations.
"This complements the MAS USD Facility, and enables our banks to continue to support the needs of businesses and individuals in Singapore and the region amid the COVID-19 pandemic," it said.
The Fed's swap arrangements with central banks around the world has "provided a critical backstop" for US dollar funding, as well as helped efforts to "maintain stability and normal functioning of financial markets during the COVID-19 pandemic", MAS said.
"These swap facilities reinforce the improvements in global US dollar funding conditions and provide certainty to market participants that US dollar funding will remain available to meet their needs."
Apart from Singapore, the Fed also has swap arrangements with 13 central banks around the world, including Australia, Brazil, South Korea, Mexico, Sweden, Denmark, Norway and New Zealand.