The central bank of Singapore and Thailand signed a Memorandum of Understanding (MoU) to improve liquidity and promote financial stability.
Under this arrangement, financial institutions operating in Singapore may obtain Singapore dollar liquidity from the Monetary Authority of Singapore by pledging Thai baht or Thai government and central bank securities.
Likewise, eligible financial institutions operating in Thailand may obtain Thai baht liquidity from Bank of Thailand by pledging Singapore dollar or Singapore government and central bank securities.
This facility will allow the central banks to accept a wider range of collateral in their liquidity provisioning facilities and also gives financial institutions greater flexibility in their liquidity management.
by RTT Staff Writer
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