GREATER FLEXIBILITY
Flexibility to facilitate operations and risk management
EXPORTERS are now allowed to sweep export proceeds into trade foreign currency accounts maintained with onshore banks to meet up to six months’ foreign currency obligations. Bank Negara Malaysia says the new policy is to facilitate operational efficiencies and risk management by business and financial institutions.
BANK Negara Malaysia has made changes to the foreign exchange administration policies for exporters, aimed at facilitating operational efficiencies and risk management.
The central bank said exporters were now allowed to automatically sweep export proceeds — without converting them first into ringgit — into their trade foreign currency accounts at onshore banks to meet up to six months’ foreign currency obligations.
The flexibility was available upon exporters establishing their six months’ foreign currency obligations with their respective onshore banks, it said.
Bank Negara said greater flexibility was also provided upon application for residents to hedge foreign currency obligations beyond six months and foreign currency exposures arising from invoices issued under international pricing practices for domestic trade in goods and services.
With the new policies, Bank Negara said non-residents would have wider access to the onshore financial market.
“Non-resident corporations are allowed to trade in ringgitdenominated interest rate derivatives via appointed overseas offices, subject to back-toback arrangements with onshore banks,” it said.
Bank Negara said this was aimed at further deepening the onshore market for interest rate derivatives to support risk management by businesses.