Emerging Markets Rates and Currencies Handbook

i. underlying Foreign Currency-denominated derivatives contract (excluding Exchange Rate Derivatives) offered by a Resident, the value of the transaction shall not exceed the net open position of the Foreign Currency exposure arising from the derivatives contract; ii. buying of Foreign Currency against Ringgit, it shall not be for deposit into Foreign Currency Account (FCA) except for temporary placement arising from delivery of Foreign Currency under the Forward Basis transaction due to extension of payment timeline of the Foreign Currency Firm Commitment or temporarily placed into the FCA for subsequent payment out on the same day; or iii. selling of Foreign Currency against Ringgit, the Foreign Currency shall not be sourced from FCA except for Foreign Currency proceeds received earlier than the maturity date of the Forward Basis transaction. A Non-Resident is allowed to buy or sell Foreign Currency against Ringgit for its own account: (a) on Spot Basis with (i) a LOB or an Appointed Overseas Office (AOO), or (b) on Forward Basis (subject to paragraph 12 of Notice 1) with a LOB or AOO for (i) Current Account transaction on Firm Commitment or Anticipatory basis; or (ii) Financial Account Transaction on Firm Commitment basis. Where the Firm Commitment is a Ringgit- denominated derivative contract (excluding Exchange Rate Derivatives) offered by a Resident, the value of the transaction shall not exceed the net open position of the Ringgit exposure arising from the derivative contract, provided that the Forward Basis transaction shall be terminated when the Firm Commitment ceases to exist or the anticipated transaction does not materialise. [For further queries on transaction via an appointed overseas office, please speak to the onshore Sales team]. For complete text on Notice 1 : Dealings in Currency, Gold and Other Precious Metals, please refer to the link : https:/ /www.bnm.gov.my/documents/20124/60360/No tice+1_Dealings+in+Currency%2C+Gold+and+Other+Pre cious+Metals.pdf Foreign Currencies A Resident is allowed to buy or sell Foreign Currency against another Foreign Currency on Spot Basis or Forward Basis with a LOB subject to FEP Notice 1 requirements. A Non-Resident is allowed to buy and sell Foreign Currency against another Foreign Currency on Spot Basis or Forward Basis with a LOB subject to FEP Notice 1 requirements. For further information and complete text of the Foreign Exchange Notices, please refer to the following links https:/ /www.bnm.gov.my/fep Interest Rate Malaysia has a dual banking system, where the non- interest rate based Islamic banking system operates alongside the interest rate based conventional banking system. BNM provides guidance on interest rate via the Overnight Policy Rate (OPR).