Out-Law News | 23 Dec 2020 | 4:18 am |
The Monetary Authority of Singapore (MAS) announced the further extension of a $60 billion swap facility arrangement with the US Federal Reserve in a move which will provide US dollar (USD) loans to businesses in Singapore up until 30 September 2021.
It is the second time that the facility has been extended - it was previously announced in July this year that it would extend to March 2021. The swap facility launched in March and enables MAS, Singapore's central bank, to exchange Singapore dollars for USD, providing USD liquidity to financial institutions in Singapore. To-date, the MAS USD facility has provided approximately $23 billion to banks.
Mark Tan of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, the law firm behind Out-Law, said: "The further extension by the MAS of the $60bn swap arrangement with the US Federal Reserve, and the corresponding extension by the MAS of its 60bn USD facility to banks in Singapore is a welcome step, particularly given Singapore's role as an international financial centre and a cross border intermediary for USD funding in Asia."
"Ultimately, this will help to ensure that USD funding will continue to be made available by the banks here to both market participants and businesses in Singapore and the region, which will in turn help to stabilize and maintain market confidence during the ongoing covid-19 pandemic," he said.
Besides Singapore, the US Federal Reserve also has swap arrangements with 13 central banks around the world as well as the Bank for International Settlements.