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03-11-2021, 07:29 AM
Choo Yun Ting
PUBLISHED NOV 1, 2021, 5:16 PM SGT
SINGAPORE - Changes have been proposed to the Monetary Authority of Singapore (MAS) Act to allow a new mechanism to facilitate transfers of official foreign reserves to the Government for longer-term management by sovereign wealth fund GIC.
The amendments, introduced in Parliament on Monday (Nov 1), will empower MAS to subscribe to Reserves Management Government Securities (RMGS) issued by the Government.
The securities will facilitate the transfer of MAS’ official foreign reserves that are above what is required for conducting monetary policy and ensuring financial stability, to the Government for longer-term management by GIC.
The amount of official foreign reserves transferred to the Government will be at the sole discretion of the central bank, which will also have sole discretion to redeem the RMGS for foreign assets before maturity and without penalty.
At present, transfers of MAS' official foreign reserves are facilitated by a reduction in the Government's Singapore dollar cash deposits with MAS as consideration.
But this transfer mechanism is increasingly facing constraints, as MAS' accumulation of official foreign reserves has persistently outpaced the growth of government deposits in recent years.
https://www.straitstimes.com/singapore/p...n-reserves
PUBLISHED NOV 1, 2021, 5:16 PM SGT
SINGAPORE - Changes have been proposed to the Monetary Authority of Singapore (MAS) Act to allow a new mechanism to facilitate transfers of official foreign reserves to the Government for longer-term management by sovereign wealth fund GIC.
The amendments, introduced in Parliament on Monday (Nov 1), will empower MAS to subscribe to Reserves Management Government Securities (RMGS) issued by the Government.
The securities will facilitate the transfer of MAS’ official foreign reserves that are above what is required for conducting monetary policy and ensuring financial stability, to the Government for longer-term management by GIC.
The amount of official foreign reserves transferred to the Government will be at the sole discretion of the central bank, which will also have sole discretion to redeem the RMGS for foreign assets before maturity and without penalty.
At present, transfers of MAS' official foreign reserves are facilitated by a reduction in the Government's Singapore dollar cash deposits with MAS as consideration.
But this transfer mechanism is increasingly facing constraints, as MAS' accumulation of official foreign reserves has persistently outpaced the growth of government deposits in recent years.
https://www.straitstimes.com/singapore/p...n-reserves
