SINGAPORE - The Monetary Authority of Singapore said on Friday (March 13) that it "stands ready to ensure the orderly functioning of financial markets and the stability of the financial system in Singapore" as the coronavirus crisis deepens worldwide.
It assured that the Singapore dollar money market and foreign exchange market are currently "functioning normally in the face of heightened volatility in global and domestic financial markets".
MAS said that it has left a higher level of liquidity in the banking system through its money market operations, and the Singapore dollar interest rates have eased in tandem with global interest rates.
"The nominal effective exchange rate of the Singapore dollar has eased in an orderly manner within the MAS policy band, in line with weakening economic conditions," it added.
However, it recognised that financial markets all over the world are coming under strain due to the widening coronavirus outbreak.
This statement comes after several Asian central banks moved on Friday (March 13) to ease a liquidity squeeze as cratering stock markets triggered a rush for cash, driving many regional currencies lower and threatening a surge in short-term borrowing costs.
Japan's central bank pledged to buy 200 billion yen (S$2.66 billion) of five- to 10-year Japanese government bonds and also inject an additional 1.5 trillion yen in two-week loans. Buying bonds from banks releases cash into the markets.
Indonesia's central bank bought six trillion rupiah (S$570 million) worth of government bonds in an auction, double its initial target, an official told Reuters, who said the bank was prepared to hold another auction if needed.
Earlier on Friday, Australia's central bank injected an unusually large amount of cash into the financial system.