ANCHOR OF ECONOMIC

AND FINANCIAL STABILITY

MANAGEMENT OF LIQUIDITY
ENHANCING SINGAPORE DOLLAR LIQUIDITY MANAGEMENT FRAMEWORK

In 2013, MAS continued to enhance our liquidity management framework, to improve our ability to provide Singapore dollar (SGD) liquidity and to meet the demand for high quality liquid assets by banks operating in Singapore.

BOJ Cross-border Collateral Arrangement
MAS has been entering into cross-border collateral arrangements (CBCAs) with foreign central banks since 2009 to strengthen our ability to provide banks in Singapore with SGD liquidity against safe and liquid foreign currency and foreign currency-denominated collateral. In July 2013, MAS added the Bank of Japan (BOJ) to the list of CBCAs established with foreign central banks. The arrangement with BOJ allows banks in Singapore to pledge Japanese government securities at the Standing Facility to obtain SGD liquidity. This collaboration reinforces the commitment of BOJ and MAS to support the long-standing economic and financial relationship between Japan and Singapore, and brings the total number of CBCAs established by MAS to eight.

Introduction of 24-week MAS Bills
To continue to meet the banking system’s demand for high quality liquid assets and further deepen domestic money markets, MAS has stepped up the issuance of MAS Bills, which have replaced 3- and 6-month T-Bills. To further develop the capacity of the MAS Bill market, MAS also extended the maturity of MAS Bills to include the 24-week tenor in January 2014. At the end of FY2013, about S$74.4 billion in outstanding MAS Bills was available to financial institutions, including S$12.8 billion of 24-week MAS Bills.