SINGAPORE said on Thursday it would not draw on a temporary credit line offered by the US Federal Reserve 'at this time' because it has enough domestic liquidity.

The Fed announced on Wednesday announced temporary 'swap' lines of credit of up to US$30 billion (S$44.6 billion) to central banks in four countries including Singapore to help those nations ease a credit squeeze.

But the Monetary Authority of Singapore (MAS) said the credit line was a 'precautionary measure' to reassure financial institutions in the country 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 central bank 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 US central bank offered the temporary lines of credit with central banks in Brazil, Mexico, South Korea and Singapore.

The US central bank said its actions were 'in response to the heightened stress associated with the global financial turmoil, which has broadened to emerging market economies.' -- AFP