MAS establishes $60b USD facility for banks

It aims to support more stable USD funding conditions in Singapore.

The Monetary Authority of Singapore (MAS) will provide up to US$60b of funding to banks in Singapore through a new MAS USD Facility.

The MAS USD Facility is said to support more stable USD funding conditions in Singapore, and facilitate USD lending to businesses in the country and the region. It will also contribute to global efforts by central banks to maintain stability and normal functioning of financial markets.

MAS will obtain USD in exchange for SGD, through a $60b swap facility with the US Federal Reserve (Federal Reserve). The central bank will lend the USD obtained from the Federal Reserve to banks in Singapore through the new MAS USD Facility, allocated through auctions.

The first auction will be conducted on 27 March with $10b in seven-day funds to be offered. This is said to cater to increased end-of-quarter demand for USD during this period.

MAS will conduct another two auctions on 30 March, where $12b in seven-day funds and $8b in 84-day funds will be offered. After this, regular weekly auctions will be conducted every Monday.

“The MAS USD Facility complements and reinforces what MAS has been doing to ensure that funding to banks in Singapore remains ample so that they can play their role in providing credit to businesses and individuals,” MAS said in a statement.