MAS sets up collateral arrangement with Bank of Thailand

Financial institutions in Singapore and Thailand will now have greater flexibility in their liquidity management.

The Monetary Authority of Singapore and the Bank of Thailand signed a Memorandum of Understanding to establish the reciprocal cross-border collateral arrangement.

A joint statement by MAS and BOT said the arrangement will help maintain financial stability in both countries.

Under the arrangement, eligible financial institutions operating in Singapore may obtain Singapore Dollar liquidity from MAS by pledging Thai Baht or Thai government and central bank securities with MAS.

Similarly, eligible financial institutions operating in Thailand may obtain THB liquidity from BOT by pledging SGD or Singapore government and central bank securities.

“This collaboration reinforces the growing trade, investment and financial relationships between Singapore and Thailand. The arrangement allows the Monetary Authority of Singapore and Bank of Thailand to accept a wider range of collateral in their liquidity provisioning facilities,” said the statement.

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