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Foreign Exchange Administration Rules to be Liberalised

19 August 2019

Bank Negara Malaysia (“BNM”) issued a press statement on 16 August 2019 announcing that the Foreign Exchange Administration Policies will be liberalised in the following respects with effect from 30 August 2019 –
 
  1. Hedging flexibility
 
  1. Residents may obtain BNM’s approval to hedge their foreign currency current account obligations up to their underlying tenure;
 
  1. Treasury centres in Malaysia may hedge on behalf of their related entities via a licensed onshore bank;
 
  1. Non-resident treasury centres outside Malaysia may hedge on behalf of their related entities in Malaysia and overseas via a licensed onshore bank or an appointed overseas office upon a one-time registration with BNM; and
 
  1. Non-residents may hedge on anticipatory basis via an appointed overseas office for settlement of trade in goods and services.
 
  1. Exemption of certain credit facilities from definition of ‘domestic ringgit borrowing’
 
Credit facilities such as credit cards and facilities of similar form which are used by corporates for miscellaneous expenses such as sundry and employees’ travel expenses are excluded from the definition of ‘domestic ringgit borrowing’ under the applicable Foreign Exchange Administration Policy on investments abroad.
 
BNM also stated in the press statement that the above liberalisation measures will be set out in Supplementary Notice No. 6 on the Foreign Exchange Administration Rules to be issued on the day when those measures take effect.

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