KUALA LUMPUR: Bank Negara Malaysia today announced further liberalisation of the foreign exchange administration (FEA) policy aimed at providing greater flexibility and efficiency for businesses to better manage their foreign exchange risks and conduct their daily operations.
BNM governor Nor Shamsiah Mohd Yunus said that with this move, Malaysians can hedge their foreign currency current account obligations up to their underlying tenure.
To facilitate greater efficiency in risk management operations, she said, treasury centres in the country are free to hedge on behalf of their related entities through a licensed onshore bank.
Speaking at a press conference to announce the second quarter growth results at BNM, Nor Shamsiah said another flexibility of the FEA is that non-resident (foreign) treasury centres can also hedge on behalf of their related entities upon a one-time registration with the central bank.
Non-residents are also allowed to hedge on anticipatory basis.
On the revised definition of domestic borrowing, Nor Shamsiah said credit facilities which were previously used by corporate bodies for miscellaneous expenses such as sundry and employees’ travel expenses are now excluded from domestic ringgit borrowings under applicable FEA policies on investment abroad.
“This is to facilitate the management of operational expenses by residents without impacting their investment activities,” she said.
The measures announced today will be effective from Aug 30.