Question:
To ask the Deputy Prime Minister (a) what is the status of the Real Time Gross Settlement System at the Monetary Authority of Singapore; (b) what caused the delay in its implementation; and (c) whether its implementation will make the Singapore dollar less vulnerable to speculative attacks by hedge funds.
Answer:
(a) MAS is in the final stages of testing the Real Time Gross Settlement (RTGS) System. We are currently conducting an Integrated Test of the System involving all participating banks. MAS together with the banks will review the results of the Integrated Test before deciding on the implementation date, which will likely be in June 1998.
(b) The RTGS system was originally scheduled for implementation at the end of 1997. This target date was set early in the project. During the course of the project, however, a number of operational and technical issues had to be resolved. Following a review of the project schedule, MAS decided that the middle of this year was a more realistic target date for implementation.
(c) The RTGS system is merely a real-time payment system to settle inter-bank payments on a gross basis, i.e. transaction by transaction, instead of accumulating all the transactions during the day to be settled on a net basis at the close of the day's business. RTGS systems are being implemented in many countries to reduce settlement risks. They do not reduce nor facilitate speculative attacks on a country's currency. How vulnerable the S$ is to a speculative attack depends mainly on Singapore's economic fundamentals.