Monetary Authority of Singapore Annual Report 2010/2011
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Issuance of short term MAS bills

MAS announced on 29 July 2010 that short term MAS bills would be issued as part of money market operations, serving as a complement to the three key instruments, namely FX swaps, clean lending and borrowing and SGS repos, which are currently used to inject or withdraw liquidity from the financial system.

As the banking system grows and adopts higher liquidity requirements, demand for liquid regulatory assets will inevitably increase. The introduction of MAS bills increases the diversity of regulatory assets available in the market, thereby allowing commercial banks to practice better liquidity management in their operations. As these bills are negotiable, banks can sell or pledge them as collateral in the interbank repo markets as well as at the MAS Standing Facility and Intraday Liquidity Facility to obtain liquidity. The greater utility and negotiability of MAS bills also lower the costs of MAS' sterilisation operations. The first issuance commenced in April 2011.