KUALA LUMPUR, Aug 16 — There will be further liberalisation of the foreign exchange administration (FEA) policy effective August 30 to provide greater flexibility and efficiency for businesses in better managing their foreign exchange risk and conducting daily operations.
In a statement, Bank Negara Malaysia (BNM) said residents can hedge their foreign currency current account obligations up to their underlying tenure, and obtain approval from the Bank to hedge financial account obligations up to the underlying tenure.
It said treasury centres in Malaysia are free to hedge on behalf of their related entities via a licenced onshore bank, to facilitate greater efficiency in centralised risk management operations.
Meanwhile, non-resident treasury centres outside Malaysia can hedge on behalf of their related entities in Malaysia and overseas, via a licensed onshore bank or appointed overseas office (AOO) upon a one-time registration with BNM.
There is also flexibility for non-residents to hedge on an anticipatory basis via an AOO for settlement of trade in goods and services.
BNM said credit facilities being used by corporates for miscellaneous expenses such as sundry and employees’ travel expenses are 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,” it added. — Bernama