Malaysian central bank steps up efforts to liberalize foreign exchange administration

Source: Xinhua| 2019-08-16 16:46:54|Editor: xuxin
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KUALA LUMPUR, Aug. 16 (Xinhua) -- The Malaysian Central Bank said on Friday that it will further liberalize the foreign exchange administration policy to provide greater flexibility and efficiency for businesses to better manage their foreign exchange risk and conduct their daily operations.

Bank Negara Malaysia, the central bank, said in a statement that the measures including greater hedging flexibility for residents and non-residents which will be effective on Aug. 30.

According to the statement, residents will be allowed to hedge their foreign currency current account obligations up to their underlying tenure. Resident treasury centers can also hedge on behalf of their related entities with licensed onshore banks.

Meanwhile, non-resident treasury centers can hedge on behalf of their related entities upon a one-time registration with Bank Negara Malaysia with licensed onshore banks or appointed overseas offices (AOO). They can also hedge on anticipatory basis via AOOs for settlement of trade in goods and services.

The central bank also said that credit facilities which are used by corporates for miscellaneous expenses such as sundry and employees' travel expenses are excluded from domestic ringgit borrowings.

"This is to facilitate the management of operational expenses by residents without impacting their investment activities," said the bank.