Bank Negara Malaysia will be expanding the list of eligible collateral following greater regional financial integration. This is aimed at enhancing the liquidity management framework. This is in line with the growing significance of regionally active financial institutions which have intensified the financial inter-linkages between economies, particularly in trade, investment and financial services.

The list of eligible collateral that financial institutions regulated by Bank Negara Malaysia can pledge to obtain ringgit liquidity from the Bank will be expanded to include foreign currency denominated securities. Currently, the eligible collateral is restricted to Ringgit denominated securities only. With the expansion, foreign currency denominated securities issued by government and central bank of EMEAP member countries in local and foreign currency will be accepted. In addition, Multilateral Development Bank securities denominated in USD, Euro, Japanese Yen and Pound Sterling will also be accepted.

The Bank will also be embarking on an initiative to establish reciprocal bilateral operational arrangements with other central banks to enable Malaysian financial institutions operating in foreign countries to obtain liquidity from the foreign central banks by pledging Ringgit denominated securities and vice versa.
 

These initiatives will serve to strengthen regional cooperation and support financial market and investment activities, hence reinforcing the regional financial integration.