The Monetary Authority of Singapore (MAS) has announced measures to relax the restrictions on the use of the Singapore dollar while adhering to its basic policy of not encouraging the internationalization of the Singapore dollar.
MAS has issued a notice, MAS 757, to replace notice MAS 621, which provides, among other things, that:
- l banks may grant credit facilities to Singapore residents (defined to mean Singapore citizens, individuals who are Singapore tax residents, and Singapore-incorporated companies or overseas subsidiaries jointly-owned or majority-owned by Singapore citizens) for projects overseas without consultation with MAS;
- l after consultation with MAS, companies which are part-owned or majority-owned by foreigners but with Singapore management control can borrow Singapore dollars for bona fide overseas projects, provided that the proceeds are first converted or swapped into foreign currency for use outside Singapore; and
- l after consultation with MAS, foreign-owned Singapore-incorporated companies with at least 20% of their revenues, profits or expenses attributable to their Singapore operations can list Singapore dollar-denominated shares where the Singapore dollar proceeds are used outside Singapore.
MAS has also announced that to help develop the bond market:
- MAS will issue more and longer-term government securities;
- statutory boards will be encouraged to issue bonds to fund infrastructure projects; and
- foreign-owned companies of good standing will be allowed to issue Singapore dollar-denominated bonds, even if the proceeds are to be used outside Singapore, subject to safeguards.