Breadcrumb

Buying and Selling of FX

Buying and Selling of FX

Any non-resident will find the Malaysian financial market is easily accessible and open through its large network of licensed onshore banks. Non-resident can also undertake FX transactions involving ringgit directly overseas via the Appointed Overseas Offices (AOO) of the licensed onshore banks.

A non-resident may undertake the following FX transactions via a licensed onshore bank or an AOO:

FX transaction for own account

  • Buy or sell foreign currency (FC) against ringgit on spot basis for any purpose.
  • Buy or sell FC against ringgit on forward basis based on underlying obligation. A ringgit derivatives contract other than exchange rate offered by a resident is considered as part of underlying obligation. There is also no restriction to unwind or cancel the forward transaction for any underlying except portfolio investment.

FX transaction on behalf

  • A non-resident entity can enter into FX transaction involving ringgit (spot or forward basis) on behalf of its resident and non-resident related entity.
  • A non-resident institutional investor (NRII), including custodian/trust bank, can enter into FX transaction on behalf of its non-resident clients. The NRII may also participate in the Dynamic Hedging Framework to actively manage its ringgit FX exposure.
  • A non-resident financial institution to enter into FX transaction on behalf of its non-resident clients for settlement of international trade in goods or services with a resident.

Apart from FX transaction, any non-resident (with or without underlying) may also trade ringgit-denominated interest rate derivative with a licensed onshore bank or an AOO.

For ease of reference, further information on hedging of FX exposures may be found here:

  1. Notice 1 – Dealings in Currency, Gold and Other Precious Metals [PDF]
  2. Frequently Asked Questions (FAQs) [PDF]
  3. List of financial institutions under the Appointed Overseas Office (AOO) Framework:
  4. Forward Market Participation Form – Institutional Investors [PDF]
  5. Forward Market Participation Form – Trust Banks and Global Custodians [PDF]
  6. NRFI Custody Passive Foreign Exchange Transaction Registration Form [WORD]