Reply to PQ on Currency Swap Agreement between MAS and PBC
Question No. 528 Notice Paper No. 163 of 2010 For Oral Answer
Date: For Parliament Sitting on 16 September 2010
Name and Constituency of Member of Parliament Mr Teo Siong Seng, Nominated Member of Parliament
To ask the Senior Minister (a) if he will provide details of the S$30 billion currency-swap agreement between the People's Bank of China and the Monetary Authority of Singapore; and (b) what impact will this have on Singapore's trade and investment linkages with China.
Mr Lim Hng Kiang, Minister for Trade and Industry and Deputy Chairman:
1 Under the arrangement, the Monetary Authority of Singapore (“MAS”) and the People’s Bank of China (“PBC”) will exchange Singapore dollars for Chinese Yuan. The swap facility will provide Chinese Yuan liquidity of up to CNY150 billion and Singapore dollar liquidity of up to SGD30 billion. The effective period of the arrangement is three years, in line with that of the other PBC RMB swap lines, and can be extended by agreement between the two sides.
2 The objective of the swap line is to promote bilateral trade and direct investment for economic development of the two countries. Trade and direct investment between Singapore and China, and ASEAN and China has grown substantially in recent years. This swap line will further strengthen these trade and investment linkages and, in particular, improve the availability of financing facilities for firms based in Singapore and the region that import from and invest in China. MAS is currently working with the PBC to operationalise the working of the swap line.