PETALING JAYA – Trading of ringgit in any shape or form overseas is against Malaysia’s policy, Bank Negara Malaysia said yesterday in censuring the recent introduction of ringgit futures trading at the Singapore Exchange and the Intercontinental Exchange, or ICE Futures Singapore.
Calling the move inconsistent with Malaysia’s Foreign Exchange Administration (FEA) policy and rules, Bank Negara reminded all market participants to observe existing rules, adding that appropriate action under the law would be taken against any person not complying with its rules.
The ringgit is a non-internationalised currency and, thus, offshore trading of ringgit, in any form whether as a non-deliverable forward traded out of offshore financial centres or as a futures, options and other derivative contracts on exchanges outside of Malaysia, is against the country’s policy.
Contravention of the FEA is an offence under the Financial Services Act 2013 and the Islamic Financial Services Act 2013.
Foreign participants should access the onshore ringgit foreign exchange market to meet their financial needs, either directly with onshore licensed financial institutions or their appointed overseas office.
Bank Negara has taken a strong stand against the trading of the ringgit in the offshore market under governor Datuk Muhammad Ibrahim, going as far as to seek written commitment from foreign banks to stop trading the ringgit in the offshore non-deliverable forwards market in November 2016.