THE Monetary Authority of Singapore on Monday said it will provide up to 25 billion yuan of funding to banks in Singapore, in an effort to deepen RMB liquidity and strengthen their ability to meet the growing renminbi business needs of customers in Singapore and the region.
Under this new initiative, RMB funding of up to three months will be channelled to the primary dealers through MAS' money market operations. These funds will enhance the dealers' credit intermediation capabilities and the overall RMB market liquidity in Singapore. Primary dealers are banks in Singapore approved by the MAS to serve as specialist intermediaries in the Singapore Government Securities and Singapore dollar money markets.
To support the development of the offshore RMB market in Singapore, MAS had previously established an overnight yuan liquidity facility as well as the MAS RMB Facility. Banks could access these backstop facilities to obtain overnight and term RMB liquidity respectively to facilitate settlement needs and financing of cross-border trade and investment.