MAS launches overnight RMB liquidity facility

RMB 5b at hand on any given day.

A facility for providing overnight Renminbi (RMB) liquidity to financial institutions in Singapore will be launched on 1 July 2014, the MAS announced in a statement on June 13.

The overnight RMB liquidity facility will provide up to RMB 5 billion in overnight funds on any given day, and it will cater to Singapore’s rapidly growing RMB market.

These initiatives will further promote the international use of RMB and facilitate the growth of the RMB offshore market in Singapore.

The People’s Bank of China (PBC) Nanjing branch has also allowed eligible corporates and individuals in the Suzhou Industrial Park (SIP) to conduct cross-border RMB transactions with Singapore.

“As the volume of RMB activities grow in Singapore, the overnight RMB facility will help alleviate end-of-day funding strains of financial institutions. This will provide a conducive environment for the continued expansion of RMB activities in Singapore,” said MAS Deputy Managing Director Jacqueline Loh.

Here’s more from MAS:

The facility complements the existing MAS RMB facility that allows banks to borrow RMB funds on a term basis for trade, direct investment and market stability purposes. Details of the overnight RMB liquidity facility will be made available on MAS’ website on 1 July 2014. 

The SIP cross-border RMB initiative was part of the agreement reached at the 10th Joint Council for Bilateral Cooperation on 22 October 2013 to strengthen China-Singapore financial cooperation.