5/16  BIS - Central bankers' speeches  For example, if MAS wanted to hedge against such negative currency translation effects, we would have to sell US Dollars from the OFR and buy Singapore Dollars. That would negate our interventions in the foreign exchange market to implement monetary policy and cause the Singapore Dollar to appreciate much more, thereby harming the economy and, not to mention, depleting the OFR. The remaining 30% of the loss, or $ billion, was due to net interest expenses from MAS' money market operations to mop up excess liquidity in the banking system. Money market operations are part and parcel of MAS' monetary policy function. Like most central banks, MAS carries out money market operations to manage the level of liquidity in the banking system. In Singapore, money market operations are also a complement to our foreign exchange intervention operations. In general, there are strong appreciation pressures on the trade-weighted Singapore Dollar due to heavy capital inflows. MAS has to periodically intervene in the foreign exchange market by selling Singapore Dollars and buying US Dollars to dampen these pressures and keep the trade-weighted exchange rate within the policy band. When MAS does this, it accumulates OFR and injects Singapore Dollar liquidity into the banking system. MAS then conducts money market operations to withdraw any excess liquidity. There are a variety of money market instruments MAS uses to withdraw liquidity but they all incur an interest cost.
Third, we will also encourage SFOs to invest in Singapore companies and the local equity market. We will make two enhancements. One, the scope of the tax incentive will be expanded to recognise all investments in non-listed Singapore operating companies (including private credit), and not just private equity investments as is the case today. Two, we will recognise twice the amount invested in Singapore-listed equities, and in eligible Exchange Traded Funds (ETFs) and unlisted funds which invest primarily in Singapore-listed equities, for purposes of meeting the SFO's investment requirement. Fourth, we will encourage SFOs to contribute more to job creation and value creation for the Singapore ecosystem. We will make two enhancements: One, we will now require that at least one of the investment professionals that SFO applicants currently need to hire is a non-family member. This will expand the pool of available jobs for professionals in Singapore. Two, all new SFO applicants will have to now meet the business spending requirement solely from spending locally unlike previously when this could be met with overseas spending. This will help channel greater benefits to Singaporebased businesses and service providers. Fifth, we will encourage SFOs to conduct philanthropic activities through Singapore, both locally and overseas. We will make two enhancements. One, to encourage giving locally, we will recognise donations to local charities alongside normal business spending. Two, to encourage giving overseas using Singapore family offices as a base, we will launch today the Philanthropy Tax Incentive Scheme (PTIS) for family offices.