Speech To Move Motion To Increase The Treasury Bills Borrowing Limit Under The Local Treasury Bills Act, at The Parliament, 28 Aug 2007

Mr Speaker, Sir, I beg to move.

"That this Parliament, in accordance with Article 144(1)(a) of the Constitution of the Republic of Singapore and section 3(1) of the Local Treasury Bills Act (Chapter 167 of the 2002 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Treasury Bills in Singapore under that Act, a further sum not exceeding Thirty Thousand Million Singapore Dollars (S$ 30,000,000,000), thereby in total a sum not exceeding Sixty Thousand Million Singapore Dollars (S$ 60,000,000,000)."

2. Sir, on 20th July 2004, Parliament resolved, in accordance with section 3(1) of the Local Treasury Bills Act (Chapter 167, 2002 Revised Edition), that the Minister for Finance be authorised to borrow by the issue of Treasury Bills in Singapore, an outstanding sum not exceeding thirty thousand million dollars (S$ 30,000,000,000). As at 1st August 2007, the outstanding amount of Treasury Bills issued is thirty thousand million dollars (S$ 30,000,000,000).

3. The proposed increase in the borrowing limit is not to cover any Government fiscal shortfall. Rather, it is for the Monetary Authority of Singapore's monetary management operations and market development purposes. With the development of the Singapore Government Securities market, Treasury Bills are increasingly traded and held by financial market participants. Treasury Bills are negotiable and cost-effective instruments, and the Monetary Authority of Singapore can use Treasury Bills to supplement its other monetary management instruments.

4. Issuing more Treasury Bills will also help to increase the liquidity in the short end of the SGS yield curve, which will support further development and diversification of the investor base for the SGS and corporate bond markets.

5. I propose, therefore, that the current ceiling for borrowing by Treasury Bills of thirty thousand million dollars (S$ 30,000,000,000), be raised by another thirty thousand million dollars (S$ 30,000,000,000), to a total of sixty thousand million dollars (S$ 60,000,000,000). This ceiling will apply to the outstanding amount of Treasury Bills.

6. Parliament is requested to enable the Government to issue Treasury Bills up to a total amount not exceeding sixty thousand million dollars (S$ 60,000,000,000).