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Introduction
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Singapore Government Securities (SGS) were initially issued to meet banks' needs for a risk-free asset in their liquid asset portfolios. In 1998, MAS spearheaded efforts to enhance the efficiency and liquidity of the SGS market as part of its strategy to develop Singapore as an international debt hub. Since then, the SGS market has grown significantly, making it one of the fastest developing bond markets in Asia.
As the fiscal agent of the Singapore Government, MAS is empowered by the Development Loan Act and the Government Securities Act to undertake the issue and management of securities on behalf of the Government.
Unlike many other countries, the Singapore Government does not need to finance its expenditures through the issuance of government bonds as it operates a balanced budget policy and often enjoys budget surpluses. The principal objectives of developing the SGS market are to: |
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provide a liquid investment alternative with little or no risk of default for individual and institutional investors; |
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establish a liquid government bond market which serves as a benchmark for the corporate debt securities market; and |
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encourage the development of skills relating to fixed income securities and broaden the spectrum of financial services available in Singapore. |
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The amount of SGS issued is authorised by a resolution of Parliament and with the President's concurrence. Each year, MAS seeks approval from the Minister for Finance for the total SGS issuance amount for the new financial year. MAS decides, in consultation with the SGS primary dealers, the timing and amount of individual bond issues. |
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