RMD A4 Vol 7 (RMD Circular No. 25/04)
28 May 2004
To : All Banks in Singapore
MAS NOTICE 757 - LENDING OF SINGAPORE DOLLAR TO NON-RESIDENT FINANCIAL INSTITUTIONS
Since 1998, MAS has progressively liberalised our policy on the non-internationalisation of the Singapore Dollar ("S$") to facilitate the development of Singapore's capital markets. Following the last revision of the policy in March 2002, MAS has recently completed another review of the policy and refined it further, as follows:-
(a) Non-resident non-financial issuers of S$ bonds and equities will no longer be required to swap or convert their S$ proceeds into foreign currencies before remitting abroad. This would allow the issuers greater flexibility in managing their S$ funds; and
(b) Temporary overdrafts of S$ vostro accounts extended to prevent settlement failures will be exempted from the policy. This would facilitate straight-through processing and more efficient handling of S$ payments.
2 Over the years, the policy has been distilled to the basic safeguards against borrowing by non-resident financial institutions for speculating in the S$. The present name of the policy, "Non-Internationalisation of the S$", has become a misnomer. MAS has therefore decided to rename the policy "Lending of S$ to Non-Resident Financial Institutions".
3 A copy of the revised MAS Notice 757 (12.2 KB) and a list of frequently asked questions (70.9 KB) about the Notice are enclosed. If you have any enquiries, please direct them to the Monetary Management Division, MAS at telephone number 62299150 or facsimile number 62299491.
(Transmitted via MASNET)
MS JACQUELINE LOH
RESERVE & MONETARY MANAGEMENT DEPARTMENT