PETALING JAYA: Further liberalisation of the foreign exchange administration (FEA) policies by Bank Negara is a big positive move and timely as it can support Malaysia’s economic revival post-Covid 19 pandemic.
This is a very good news indeed to multinational companies (MNCs) in the country, given greater flexibilities accorded to the export-oriented industries to secure better business operations, cash flow and foreign exchange (forex) risk management.
Oleon (Asia-Pacific) Sdn Bhd finance manager Henry Chin said the liberalisation measures would help reduce the cost of doing business in Malaysia, therefore attracting more foreign direct investment (FDI) into the country.
“Of course, (it will benefit MNCs with) lower forex risk exposure via natural hedging in the competitive market.
“In addition, operations will have more time to formulate and focus on other risk management strategies, ” he told Bernama.
Chin added that business risk would always exist, but the key success factors were how a company reacts to changes and its risk management strategy.
Meanwhile, Panasonic Financial Centre (M) Sdn Bhd managing director Doris Tay said the decision to further liberalise the FEA would improve Malaysia’s competitiveness to attract FDI into the country.
“With offsetting and settlement in foreign currency liberalisation, natural hedge can be carried out more efficiently, ” he added.
Bank Negara had, in late March, announced a further liberalisation of the FEA as part of its continued efforts to strengthen Malaysia’s position in the global supply chain and foster a conducive environment in attracting FDI into the country.
The liberalisation provides greater flexibility to businesses, among others, and the removal of the export conversion rule. ─ Bernama