We have observed that interbank interest rates tend to rise towards the end of the day, particularly after the broadcast of the end-of-day cheque clearing figures. We will therefore make available to banks an end-of-day liquidity facility so that the banks have an additional source of funds to meet their liquidity needs in such situations.
2. Under this facility, banks may borrow S$ funds from the MAS via overnight repurchase transactions (repos) of Singapore Government Securities (SGS).
3. The details of the end-of-day liquidity facility are as follows:
Eligibility
The facility is available to all banks in Singapore which are participants of the MAS Electronic Payment System (MEPS). Banks that are non-participants of MEPS should make appropriate arrangements with their agent banks for their financing needs.
Operating window
The operating window for the facility is from the time of broadcast of cheque clearing figures to 5.50pm daily, Monday to Friday. Banks wishing to draw on the facility should contact officers from the Monetary Management Division of MAS by phone at 2299151/2 during the operating window.
Maturity and Amount
Banks which draw on the facility will receive S$ funds only on an overnight basis via a SGS repurchase transaction. As a guide, the amount of funds that can be borrowed is subject to maximum of 1% of the bank's liabilities base, or S$200 million, whichever is lower. Where this amount is less than S$2 million, the bank may borrow up to a maximum of S$2 million. The minimum amount that a bank may borrow each time is S$0.5 million.
Pricing
The interest rate to be charged on the repurchase transaction will be 2% above the reference rate. The reference rate is the 1-month S$ SIBOR fixed by the Association of Banks in Singapore (ABS) at 11 am Singapore time on the same working day.
Collateral
For the repurchase transaction, banks may use as collateral only SGS held in excess of what is required to meet their Minimum Liquid Asset requirements. Banks must ensure that they have sufficient SGS before utilising the facility. When valuing the collateral, the MAS will use the average closing prices of the SGS submitted by primary dealers.
Settlement
To effect timely settlement of the repurchase transaction, banks must ensure that confirmation for the transaction is sent to the MAS by 6.05 pm. Confirmations should be sent to the MAS' Finance Department either via fax at 229 9393 or SWIFT authenticated message MT199. Details to be included in the confirmation are set out at Appendix I.
4. The facility will be available from 1 Nov 2000. Only banks that have executed the PSA-ISMA master repo agreement with the MAS will be able to draw on the facility. Copies of the agreement are available upon request from the Monetary Management Division.
5. Notwithstanding the maximum amount of S$ funds that banks may be able to access through the facility, the MAS has the discretion to decide the final amount of funds which banks may borrow. The MAS reserves the right to revise the margin over the 1-month S$ SIBOR as warranted by market conditions.
6. The MAS also reserves the right to suspend the facility in exceptional circumstances, or deny any bank access to the facility if it is found to have abused the facility to contravene any of the MAS' regulations and guidelines.
7. Should you have any queries on the end-of-day liquidity facility, please contact officers in the MAS? Monetary Management Division at 2299151/2.
Yours faithfully
ONG CHONG TEE
EXECUTIVE DIRECTOR
MARKETS & INVESTMENTS
Appendix 1 : Form of Confirmation
 (PDF, 5.08KB)
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