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Foreign Exchange Market

The Malaysian FX market is open and accessible through its large network of licensed onshore banks, or via Appointed Overseas Offices of those banks.

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Accessing our Foreign Exchange Market

Currently, there are 163 AOOs from 21 banking groups operating in 35 countries that enable non-residents to undertake FX transactions involving ringgit directly overseas.

Appointed Overseas Office (AOO)

The AOO serves to facilitate wider price availability and enhance liquidity of ringgit FX transactions outside the Malaysian trading hours. Pilot AOOs publish the USD/MYR spot reference prices via major platforms after the Malaysian trading hours.

Counterparties

Counterparties comprise all the licensed onshore banks in Malaysia, both local and foreign banks, custodian banks both local custodians and global custodians as well as international central securities depositories that can be approached by investors for access to the Malaysian financial market, apart from the Appointed Overseas Offices (AOOs) available globally to facilitate investors.

Primary Market Makers

Building from the notable progress of the AOO Pilot Programme, in terms of improving investors' access to the ringgit market, particularly during London and New York trading hours, the structure was transitioned to a permanent arrangement with the following Pilot AOOs appointed as Primary Market Makers:

  • Bank of America
  • BNP Paribas
  • CIMB Bank
  • HSBC Bank
  • JP Morgan Chase
  • Maybank
  • Standard Chartered Bank
  • Deutsche Bank
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Hedging Frameworks

Alternative hedging frameworks are available to address differing needs and circumstances of investors. Non-residents with ringgit underlying exposure are free to transact in ringgit FX spot and forward transactions with onshore banks or AOOs. Non-residents may register under any of the following frameworks for greater flexibility.

Dynamic Hedging Programme

The flexibility to actively manage FX risk exposure via forward hedging activities with onshore banks and AOOs without the need to show any documentation.

Registration by investors may be submitted directly to BNM at investorregister @bnm.gov.my or via onshore banks or AOOs.

Trust banks or global custodian banks may submit on behalf of investors to BNM.
Passive Hedging

Trust / custodian banks may transact on behalf of clients via onshore banks (no registration) or AOOs (require registration).

Registration by trust/custodian banks may be submitted directly to BNM at FEPinfo@bnm.gov.my or via AOOs.
Dynamic Hedging Passive Hedging
Buy USD / Sell MYR forward Up to 100% of underlying asset Up to 100% of underlying asset
Sell USD / Buy MYR forward Up to 25% of underlying asset* -
Unwinding of forward Allowed Not allowed if underlying exists
Documentation Not Required Required

* Investors may apply to buy MYR forward above the 25% limit, subject to review on a case-by-case basis

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