The Monetary Authority of Singapore (MAS) has denied market commentaries which said that it has been intervening heavily to support Singapore’s currency.

MAS said in a news release on Tuesday: “These reports had erroneously cited the fall in Singapore’s official foreign reserves (OFR) and MAS’ FX swaps since mid-2014 as an indication of heavy intervention by MAS to support the Singapore Dollar Nominal Effective Exchange Rate.”

Singapore’s official foreign reserves declined by US$29 billion from June 2014 to US$249 billion as at end-March 2015. This came after an increase of US$105 billion over the preceding five years.

MAS stated that the decline in the US dollar (USD) value of the OFR in the last nine months till end-March 2015 was due to currency translation effects arising from the broad-based appreciation of the USD against other major currencies in the OFR.

Over the period of June 2014 to March 2015, the stock of FX swaps fell by US$24 billion to US$34 billion. MAS said it allowed its FX swaps to mature as it increased reliance on MAS bills as a money market instrument.

“Most of the proceeds from the maturing FX swaps were in excess of what MAS needed in the OFR to maintain confidence in the Singapore dollar, and hence were transferred to the Government for management by GIC over a longer investment horizon,” MAS said.

“This is hence a transfer of assets, not a reduction in Singapore’s overall reserves.”

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