TREASURY BILLS

The Minister for Finance (Dr Richard Hu Tsu Tau): Mr Speaker, Sir, I beg to move,

That this Parliament, in accordance with section 3(1) of the Local Treasury Bills Act (Chapter 167, 1988 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Treasury Bills in Singapore, a revolving sum not exceeding fifteen thousand million Singapore dollars (S$15,000,000,000).

Sir, on 25th May 1995, Parliament resolved, in accordance with section 3 of the Local Treasury Bills Act (Chapter 167), that the Minister be authorised to borrow, by the issue of Treasury bills in Singapore, a sum not exceeding S$10,000 million. This limit is applicable to the outstanding amount of Treasury bills. As of 1st April 1999, the outstanding amount of Treasury bills issued is S$8,940 million.

There is a need for the current limit to be raised. More Treasury bills need to be issued to meet market demand and to mop up excess liquidity in the banking system, where necessary. The Monetary Authority of Singapore will be gradually stepping up Treasury bill issues to support capital market development efforts. With the proposed increase in Treasury bill issuance, the annual debt servicing cost on outstanding Treasury bills is expected to increase from about S$200 million per annum currently, to about S$260 million per annum in FY2003. The earnings from foreign reserves acquired, when the S$ funds withdrawn through issue of Treasury bills are recycled back to the market, are expected to more than offset this interest cost.

It is proposed, therefore, that the current ceiling for borrowing by Treasury bills of S$10,000 million, be raised by another S$5,000 million to a total of S$15,000 million.

Parliament is requested to enable the Government to issue the Treasury Bills up to a total amount not exceeding S$15,000 million.

Sir, I beg to move.

Question put, and agreed to.

Resolved,

That this Parliament, in accordance with section 3(1) of the Local Treasury Bills Act (Chapter 167, 1988 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Treasury Bills in Singapore, a revolving sum not exceeding fifteen thousand million Singapore dollars (S$15,000,000,000).