USAGE OF SINGAPORE DOLLAR

Mr Shriniwas Rai asked the Deputy Prime Minister whether the Monetary Authority of Singapore will allow Singapore based companies to use the Singapore dollar for their projects outside Singapore.

BG Lee Hsien Loong: Singapore residents may borrow S$ for use outside Singapore, without the need to consult MAS. Singapore-based companies which are not jointly-owned or majority-owned by Singapore citizens and hence are non-residents, have to consult MAS if they wish to borrow S$ for use overseas.

As a working guideline, the amount of S$ financing allowed for such projects will be more generous where the companies are under Singaporean management control or have Ministry of Trade and Industry (MTI)/Economic Development Board (EDB) sponsorship. Such companies will be allowed 100% of the project costs financed in S$ if the Singaporean shareholding is between 21% and 49%, or up to 50% of the project costs if the Singaporean shareholding is less than 21%. Overseas projects without Singaporean management control and MTI/EDB sponsorship will be allowed S$ financing up to the proportion of the Singaporean shareholding.

In all cases, the S$ proceeds from the credit facilities must be converted or swapped into foreign currency for use outside Singapore. This follows naturally as the S$ is not an international currency.