According to UBS, Bank Negara is likely to cut its overnight policy rate by 25 basis points in 2015, with lower oil prices cushioning the pressure on inflation.
HONG KONG: Malaysia’s central bank has asked foreign banks to refrain from trading in the offshore non-deliverable forwards market in the ringgit, according to a letter seen by a Reuters sent to banks.
The letter, sent by onshore custodians to foreign banks, asks them to cease any transactions in any offshore Malaysian ringgit non-deliverable forwards or offshore derivatives when unwinding their positions in Malaysian markets.
Two separate sources at other banks confirmed receipt of the letter.
At 40% of the total outstanding bond market, Malaysia’s foreign holdings are one of the largest in Asia.
Investors typically use the liquid NDF markets in Singapore and Hong Kong to hedge their exposure because of the many restrictions in the domestic market. -Reuters
* See also BNM acts to stem volatility, says onshore rates are the right reference
