KUALA LUMPUR, May 16 (Xinhua) -- Malaysia's central bank Bank Negara Malaysia (BNM) on Thursday announced several initiatives to improve debt and foreign exchange markets efficiency, accessibility and liquidity.
The BNM said in a statement that it will further increase the availability of off-the-run bonds to be borrowed via the repurchase agreement (repo) for market-making activities.
To further develop an effective hedging platform for investors, the central bank is collaborating with regulators Securities Commission Malaysia, Bursa Malaysia and key market players to further enhance the delivery mechanism for Malaysia Government Securities (MGS) futures settlements.
Meanwhile, in order to enhance onshore market liquidity and accessibility, trust banks and global custodians can now undertake dynamic hedging on behalf of their underlying clients.
In a bid to increase the flexibility for dynamic hedging programme participants to manage foreign exchange risks, registered institutional investors can now enter into forward contracts to buy ringgit beyond the current 25 percent (of underlying assets) threshold upon approval by the BNM.
The central bank also simplified foreign exchange transaction and documentation process, in order to ease investors' accessibility to the onshore foreign exchange market.
The BNM will continue to facilitate the market-making capacity of Appointed Overseas Offices to ensure sufficient access to ringgit prices.
