KUALA LUMPUR, Aug 17 — Exporters are allowed to automatically sweep export proceeds into their trade foreign currency accounts maintained with onshore banks to meet up to six months’ foreign currency obligations without the need to first convert proceeds into ringgit with immediate effect.

This flexibility is available upon exporters establishing their six months’ foreign currency obligations with their respective onshore banks and is among the enhancements to the Foreign Exchange Administration policies announced by Bank Negara Malaysia (BNM) today.

"It is aimed at facilitating operational efficiencies and risk management by businesses and financial institutions,” it said in a statement today.

As for the flexible hedging of foreign currency obligations, BNN said greater flexibility would be provided upon application to the bank for residents to hedge foreign currency obligations beyond six months and foreign currency exposures arising from invoices issued in foreign currency under international pricing practices for domestic trade in goods and services.

The central bank said non-resident corporations would be allowed to trade in ringgit-denominated interest-rate derivatives via the Appointed Overseas Offices, subject to back-to-back arrangements with onshore banks.

"This aims to further deepen the onshore market for interest-rate derivatives to support risk management by businesses,” it added. — Bernama