Singapore and Indonesia Central Banks Extend Swap Arrangement
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The extension will support monetary and financial stability in both countries amid the COVID-19 pandemic, MAS said.
Bank Indonesia (BI) and the Monetary Authority of Singapore (MAS) have agreed to extend a $10 billion bilateral financial arrangement for another year, MAS announced on Thursday.
This is the second extension of the arrangement, which was launched in 2018 for one year. It enables the two central banks to access foreign currency liquidity from each other, if needed, to preserve monetary and financial stability.
It comprises a local currency bilateral swap agreement that allows for the exchange of local currencies between the two central banks of up to S$9.5 billion or IDR 100 trillion ($7 billion equivalent), and an enhanced bilateral repo agreement of $3 billion that allows for repurchase transactions between the two central banks to obtain USD cash using G3 government bonds as collateral.
Questions & Answers
Q.What is the primary purpose of this financial arrangement between Singapore and Indonesia?
What is the primary purpose of this financial arrangement between Singapore and Indonesia?
The arrangement aims to support monetary and financial stability in both countries. It allows their central banks to access foreign currency liquidity from each other if required, especially during the COVID-19 pandemic.
Q.What are the two main components that make up the $10 billion financial arrangement?
What are the two main components that make up the $10 billion financial arrangement?
It comprises a local currency bilateral swap agreement worth S$9.5 billion or IDR 100 trillion, and an enhanced bilateral repo agreement of $3 billion. The repo agreement enables the central banks to obtain USD cash.
Q.When was this bilateral financial arrangement originally established?
When was this bilateral financial arrangement originally established?
The bilateral financial arrangement was originally launched in 2018 for a period of one year. This recent announcement marks the second extension of the agreement between the two central banks.