KUALA LUMPUR: Bank Negara will transition from the Kuala Lumpur Interbank Offered Rate (KLIBOR) to the Malaysia Overnight Rate (MYOR) and Malaysia Islamic Overnight Rate (MYOR-i).
“By the end of the transition, KLIBOR will cease to exist effective Jan 1, 2029,” the central bank said in a statement.
MYOR and MYOR-i, introduced in 2021 and 2022 respectively, are transaction-based benchmark rates based upon transactions in active and liquid markets.
Bank Negara said the transition is part of Malaysia’s broader financial benchmark reform agenda outlined in Bank Negara’s Financial Sector Blueprint 2022-2026. It is also consistent with global financial benchmark reform initiatives.
“The transition to MYOR and MYOR-i serves as a proactive, forward-looking initiative to ensure the continuous robustness of domestic financial benchmarks,” it added.
The central bank said market participants are expected to be operationally ready by Oct 1, 2026 to offer products referencing MYOR and MYOR-i as part of their standard offerings.
It added that by July 1, 2027, KLIBOR shall no longer be used in new trades across all products, while MYOR-i will be required as the reference rate for all new Islamic products.
By June 30, 2028, all legacy KLIBOR contracts will be converted to MYOR/MYOR-i where possible, and any remaining contracts shall incorporate robust fallback provisions.
“Bank Negara, in collaboration with the Financial Markets Committee (FMC), will continue to work closely with industry stakeholders to ensure industry-wide readiness for the transition.
