Bank Negara eases further forex framework

KUALA LUMPUR: Bank Negara Malaysia has announced further liberalisation in the foreign exchange administration (FEA) framework.

The framework is aimed at providing greater hedging flexibility for residents to better manage their foreign exchange (forex) risk.

Bank Negara governor Datuk Nor Shamsiah Mohd Yunus said under the renewed framework, residents could hedge their foreign currency obligations for longer tenure.

“Flexibility for residents to hedge their foreign currency obligations is now extended to 12 months, from the previous six months, which will facilitate efficient financial planning by businesses.

“Residents may also obtain approval from Bank Negara to hedge their foreign currency obligations beyond 12 months,” she said during the Bank Negara Annual Report 2018 media briefing, here, yesterday.

Small and medium enterprises (SMEs) with net import obligations can also receive payments in foreign currencies from resident exporters.

“In recognising SMEs’ limited hedging capabilities, as the net importers within the global supply chain of goods and services, SMEs are allowed to receive foreign currency payment from resident exporters for their domestic trade in goods and services,” she said.

Shamsiah said the measure would take effect from May 2 to provide time for banks to set up the flexibility for eligible SMEs and the resident exporters.

Residents may also obtain approval from Bank Negara to hedge their foreign currency obligations beyond 12 months. DATUK NOR SHAMSIAH MOHD YUNUS

Bank Negara governor