Buying and Selling of FX
A resident is free to buy or sell ringgit against foreign currency (FC) with a licensed onshore bank (excluding international Islamic banks) on spot or forward basis for current and financial account transactions either on firm commitment or anticipatory basis.
A resident is free to cancel or unwind their existing forward position involving ringgit for any underlying commitment (except portfolio investment) with any licensed onshore bank.
Under Dynamic Hedging Framework, a resident institutional investor registered with BNM is free to enter into forward contracts to buy ringgit up to 100% of its invested underlying FC-denominated asset or unwind the forward contracts entered, without documentary evidence with a licensed onshore bank, for the purpose of managing its FC exposure. The unwinding of its initial forward contract can be undertaken with the same or different counterparty licensed onshore bank it has entered the initial forward contract with.
A resident is also free to hedge non-FX derivative contracts offered by a resident provider up to the net open position (NOP) of the FX exposure with any licensed onshore bank. The resident is required to unwind the forward position if it exceeds the NOP.
A resident entity is free to undertake the FX transactions above on behalf of the resident and non-resident within its group of entities (excluding financial institutions).
Further Information
- Notice 1 – Dealings in Currency, Gold and Other Precious Metals [PDF]
- Frequently Asked Questions (FAQs) [PDF]
Application Submission
Resident can register for dynamic hedging framework by submitting Forward Market Participation Form – Institutional Investors for Dynamic Hedging Framework [PDF]
