MAS transfers S$75b excess Official Foreign Reserves to government

This brings the stock OFR to around 95% of Singapore’s GDP.  

The Monetary Authority of Singapore (MAS) announced the transfer of some S$75b excess Official Foreign Reserves (OFR) to the government.

The stock of OFR has grown steadily over the years, reaching S$563b, or about 106% of Singapore’s gross domestic product, by end-2021. MAS noted this is well in excess of what it requires.

“This reflects the persistently strong appreciation pressures on the S$NEER arising from Singapore’s positive net savings and large capital inflows from abroad,” MAS said.

It noted the transfer of S$75b will bring the stock of OFR remaining on MAS’ balance sheet to around 95% of the GDP.

“MAS expects further transfers of excess OFR to the Government over the course of the year to bring the OFR to the optimal amount,” the agency added.

The outstanding holdings of Reserves Management Government Securities will be published on its website from 14 April 2022 and updated each month thereafter.

MAS noted the OFR is instrumental in implementing monetary policy and maintaining the financial stability in Singapore.

It periodically assesses the optimal amount of OFR necessary, which it had estimated to be between 65% and 75% of the GDP, currently.