Bank Negara Malaysia announces changes in the foreign exchange administration policies aimed at facilitating efficiencies and risk management by businesses and financial institutions.
The changes are:
I. Greater flexibility in the management of export proceeds
Exporters are allowed to automatically sweep export proceeds into their Trade Foreign Currency Accounts maintained with onshore banks to meet up to 6 months’ foreign currency obligations without the need to first convert proceeds into ringgit. The flexibility is available upon exporters establishing their 6 months’ foreign currency obligations with their respective onshore banks.
II. Flexible hedging of foreign currency obligations
Greater flexibility is provided upon application to the Bank for residents to hedge:
- foreign currency obligations beyond 6 months; and
- foreign currency exposures arising from invoices issued in foreign currency under international pricing practices for domestic trade in goods and services.
III.Wider access for non-residents to the onshore market financial market
Non-resident corporations are allowed to trade in ringgit-denominated interest rate derivatives via the Appointed Overseas Offices, subject to back-to-back arrangements with onshore banks. This aims to further deepen the onshore market for interest rate derivatives to support risk management by businesses.