Singapore, 7 April 2022…The Monetary Authority of Singapore (MAS) today announced that it has transferred excess Official Foreign Reserves (OFR) of S$75 billion to the Government through a subscription of Reserves Management Government Securities (RMGS).

2   The MAS Act 1970 was amended in February 2022 to allow MAS to subscribe to RMGS. This is a new mechanism to facilitate the transfer of OFR that is not needed for the conduct of monetary policy and financial stability from MAS to the Government, for longer-term investment by GIC. The transfer of assets from MAS to the Government does not change Singapore’s total foreign reserves, nor make available funds which the Government can spend.For more information on RMGS, read the Second Reading speech and the relevant FAQs.

3   The OFR plays an important role in enabling MAS to implement monetary policy and maintain financial stability in Singapore. MAS periodically assesses the optimal amount of OFR that is necessary to fulfil these objectives. The optimal amount of OFR that MAS estimates it needs is currently 65% to 75% of GDP.     

4   The stock of OFR has grown steadily over the years, to reach S$563 billion, or about 106% of GDP, at the end of 2021, well in excess of what MAS requires. This reflects the persistently strong appreciation pressures on the S$NEER arising from Singapore’s positive net savings and large capital inflows from abroad. After the transfer of S$75 billion of OFR to the Government, the stock of OFR remaining on MAS’ balance sheet is estimated at around 95% of GDP. MAS expects further transfers of excess OFR to the Government over the course of the year to bring the OFR to the optimal amount.

5   MAS’ outstanding holdings of RMGS will be published on its website from 14 April 2022 and updated each month thereafter. 

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