Singapore has announced a huge package of measures to liberalise the use of the Singapore dollar, but insists internationalisation of the currency is still out of the question. Deputy Prime Minister and monetary authority chairman Lee Hsien Loong said: 'We must not inadvertently create the misimpression that it is now open season for speculation in the Singapore dollar, especially in the present external environment, where exchange rates of the Asian countries have far from stabilised.' The changes being made will be 'incremental and evolutionary' rather than 'dramatic or spectacular', Mr Lee said at yesterday's launch of the Monetary Authority of Singapore's (MAS) electronic payment system for real time inter-bank settlements. Nevertheless, they are still probably the boldest the republic has seen and are an integral part of Mr Lee's campaign to boost Singapore as a regional financial hub. For instance, more foreign firms listed in Singapore will be allowed to quote their share prices in the local currency. Currently, most of Hong Kong and mainland firms listed there quote their shares in US dollars, making them less attractive to local retail players. As an initial working guideline, the MAS said applications from companies with at least 20 per cent of their revenues, profits, or expenses attributable to Singapore would now be approved. Other applications may also been given the go-ahead on a case-by-case basis, it said. 'This guideline is still conservative, but we plan to review it periodically, and, if appropriate, relax it further,' Mr Lee said. The regulations will also be changed to allow Singapore dollar loans to be granted to residents for use outside Singapore without prior MAS approval. Companies owned, part-owned or managed by Singaporeans overseas also qualify. This is to boost Singapore's regionalisation drive. One important catch will be that funds will have to be converted out of Singapore dollars before leaving the country. Non-residents will still have to apply to the MAS for approval. Most of the planned changes focus on further enabling Singapore to expand its capital markets. By allowing greater use of Singapore dollars it hopes to make them more liquid. 'To become a world-class financial centre, Singapore needs to develop deep and broad capital markets,' Mr Lee said. 'This will attract a broad range of international issuers, investors and intermediaries. 'As our domestic economy is small, our capital markets can only grow by listing and trading more foreign equities and bonds. We need to promote the origination, listing, and trading of these foreign securities here.' In a bid to turn Singapore into a regional bond market hub, foreign entities will now be allowed to issue Singapore dollar-denominated bonds, even if the proceeds are to be used outside Singapore. Again approval will be on condition that the Singapore dollar proceeds are converted or swapped into foreign currency. This is to prevent an off-shore Singapore dollar market emerging. To increase interest in Singapore Government securities, non-residents will be allowed to engage in Singapore dollar-denominated repurchase agreements. To help develop the mortgage-backed securitisation market in Singapore, banks will be allowed to transact Singapore dollar currency swaps and interest rate swaps with Singapore incorporated special-purpose vehicles, subject to various conditions. In addition, the Housing Development Board is considering securitising its mortgages for issue as high-grade bonds. Yesterday's changes could be just the start. 'So long as the stability of the exchange rate is not compromised, the actual implementation of the non-internationalisation policy will continue to evolve as we gain experience with the new rules, and as our financial sector and capital markets grow and develop.' Kanika Singh, economist at Independent Economic Analysis, said: 'The whole idea is to attract money coming in instead of going out, like everyone would like to in the region. 'The government is also trying to kick-start its bond market.' Analysts said they expected the changes to have little impact on the Singapore dollar's exchange rate given the MAS' strong anti-internationalisation remarks. The Singapore dollar barely budged yesterday in response to Mr Lee's announcement.