THE Monetary Authority of Singapore (MAS) said yesterday that it would not draw on a credit line offered by the United States Federal Reserve "at this time" because it has enough domestic liquidity.

The Fed had announced temporary "swap" lines of credit of up to US$30 billion (S$44 billion) to central banks in four countries, including Singapore, to help them ease a credit squeeze.

But MAS said the credit line was a "precautionary measure" to reassure financial institutions in Singapore that they would have ongoing access to US dollars.

Most of these financial institutions have global operations and rely on Singapore as the largest US-dollar and foreign-exchange centre in Asia outside of Japan, the authority said in a statement.

"MAS judges that it is not necessary to draw on the swap facility at this time, but will continually assess the need as global conditions develop," it said, adding that the swap facility will run until April 30, 2009.

"There is sufficient liquidity in the Singapore-dollar market to meet the need of the banking system here."

The authority said the facilities are designed to help improve liquidity conditions in global financial markets and "to mitigate the spread of difficulties in obtaining US-dollar funding in fundamentally sound and well-managed economies".

Besides Singapore, other countries offered the temporary lines of credit are Brazil, Mexico and South Korea.

The Fed said its actions were "in response to the heightened stress associated with the global financial turmoil, which has broadened to emerging-market economies".