Singapore, 24 December 2021… The Monetary Authority of Singapore (MAS) announced today that the MAS US Dollar (USD) Facility (Facility) will expire on 31 December 2021The Facility’s final 7-day and 28-day auctions will be held on 27 December 2021.. The MAS’ temporary US$60 billion swap arrangement with the US Federal Reserve (Federal Reserve) will also expire on the same dayMAS established the US$60 billion swap arrangement with the Federal Reserve on 19 March 2020. On the back of this swap arrangement, MAS established the MAS USD Facility on 26 March 2020 to lend USD to banks in Singapore. The swap facility and the MAS USD Facility were extended thrice, through 31 December 2021..
2 MAS established the Facility on 26 March 2020, on the back of a swap arrangement with the Federal Reserve. The Federal Reserve had established temporary swap arrangements with nine central banks that month to lessen strains in USD funding markets as the COVID-19 pandemic unfolded. Due to heightened uncertainty, USD funding conditions had tightened globally at the time arising from increased demand for USD by financial institutions and corporates.
3 Since its inception, the Facility provided a total of US$24.6 billion through 91 transactions to a broad mix of local, regional and international banks. This helped to intermediate cross-border USD funding, for use in Singapore and the region, in the midst of the crisis.
4 USD funding conditions in Singapore and the region have normalised and continue to be stable. Usage of the Facility has declined significantly since July 2020. Given these improvements in global USD funding conditions, the Federal Reserve will let the temporary swap lines for the central banks expire, and MAS will also discontinue operation of the Facility. 5 MAS continues to remain vigilant to USD funding conditions in Singapore and will be prepared to take action in the event of severe strains in the USD funding market.