By Kunle SHONUGA
Malaysian Central Bank on Wednesday announced it has further liberalised the foreign exchange administration (FEA) framework to provide greater hedging flexibility for residents to better manage their foreign exchange risk.
The central bank said in a statement that the measure, which is effective immediately, allowed Malaysian residents to hedge their foreign currency obligations to a longer tenure of 12 months.
It noted that rather than six months previously, to facilitate efficient financial planning by businesses.
According to the statement, Malaysian residents may also obtain approval from the central bank to hedge their foreign currency obligations beyond 12 months.
Meanwhile, Malaysia’s small and medium enterprises (SMEs) with net import obligations can receive payment in foreign currency from resident exporters, which will be effective on May 2.
“In recognising SME’s limited hedging capabilities, SMEs, which are net importers within the global supply chain of goods and services, are allowed to receive foreign currency payment from resident exporters for their domestic trade in goods and services,” the central bank said.===Xinhua
