This is among several measures announced today by the Financial Markets Committee (FMC), which was established by Bank Negara Malaysia, aimed at enhancing the liquidity of the foreign exchange market. Another measure announced allows exporters to retain only up to 25% of export proceeds in foreign currency as against 100% at present. FMC said foreign currency arising from conversion of export proceeds will be used to ensure continuous liquidity of foreign currency in the onshore market. These measures, it said, are intended to promote a deeper, more transparent and well-functioning onshore foreign exchange market where genuine investors and market participants can effectively manage their market risks with greater flexibility to hedge on the onshore market. A deep and liquid onshore foreign exchange market will enable investors to better manage against volatile currency movements, it added.

Source: The Edge Markets December 02, 2016 12:13 UTC