Singapore And Thailand Ink Memorandum Of Understanding
The Monetary Authority of Singapore (MAS) and the Bank of Thailand (BOT) inked a Memorandum of Understanding (MoU) on Monday to maintain a cross-border collateral arrangement that aims to secure the financial stability of both countries.
Under the arrangement, qualifying financial institutions in Singapore may obtain Singapore dollar liquidity from the Monetary Authority by pledging Thai government or central bank securities and the Thai currency. The same procedure is applicable for financial institutions based in Thailand.
“In times of market stress, cross-border collateral arrangements between central banks can help sustain liquidity and thereby promote financial stability. This new arrangement with BOT recognises the deep inter-linkages between our two economies,” said MAS Managing Director Ravi Menon in an official statement.
This effort is seen to strengthen the trade and investment ties between the two countries. The agreement is also seen to provide more choices of foreign collaterals for liquidity institutions.
The MAS also signed a reciprocal cross-border Memorandum of Understanding with the same conditions with Malaysia’s central bank, the Bank Negara Malaysia last November.
The MAS has been signing MoUs with central banks across the region for liquidity swap arrangements. It has also inked an MoU with a Dutch bank in the Netherlands three years ago.
Singapore is constantly strengthening its bilateral trade relations with countries in Europe and Asia. The city-state recently inked a memorandum of agreements with Sri Lanka, India and Portugal.
Singapore and Thailand foster a bilateral cooperation in many growth areas such as the economy, tourism, education and defense. The two countries have committed to develop these key areas through the Singapore-Thailand Enhanced Partnership (STEP) Programme.
Singapore remains as one of the leading investors in Thailand’s economy and ranks high in Thailand’s list of major trading partners. Both countries also work closely at a regional level during the ASEAN, ASEM, and APEC fora.