Malaysia lib­er­al­izes forex pol­icy

Banking Frontiers - - News Regulator -

The new gov­er­nor of Cen­tral Bank of Malaysia Nor Sham­siah Mohd Yunus has ini­ti­ated ac­tion to lib­er­al­ize the coun­try’s for­eign ex­change pol­icy and sig­naled a more con­cil­ia­tory ap­proach to reg­u­lat­ing over­seas in­sur­ance com­pa­nies. This is seen as a ma­jor shift away from the pre­vi­ous ad­min­is­tra­tion’s tough stance on in­ter­na­tional fi­nan­cial in­sti­tu­tions. These ac­tions are likely to re­as­sure those in­ter­na­tional in­vestors who have been im­pacted by Malaysia’s ag­gres­sive push­back against Chi­nese in­vest­ment and those who fear the govern­ment will sac­ri­fice mar­ket lib­er­al­ism for more na­tion­al­is­tic poli­cies it wants to adopt. Un­der the new frame­work, Malaysian ex­porters will no longer be re­quired to con­vert for­eign ex­change to the Malaysian cur­rency of ring­git and back again as part of hon­or­ing obli­ga­tions in in­ter­na­tional cur­rency. Over­seas com­pa­nies will now be able to trade in ring­git-de­nom­i­nated in­ter­est rate de­riv­a­tives while Malaysian res­i­dents will have more op­tions to hedge for­eign cur­rency ex­po­sures.

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