KUALA LUMPUR: Effective July 18, the US dollar-ringgit spot fixing will be based on market transaction data.
Bank Negara Malaysia and Financial Markets Association of Malaysia, in a joint statement, said the closing hour for onshore ringgit market will also be extended from 5pm to 6pm.
"This will give businesses additional time to complete their foreign exchange transactions," it said, adding that onshore market participants can continue to transact after the official closing hour.
Based on a new methodology, the reference rate – to be known as Kuala Lumpur USD/MYR Reference Rate, will be more transparent and better reflects underlying trades during the day.
It will be published daily at 3.30pm and is computed based on weighted average volume of the interbank USD/MYR FX spot rate transacted by the domestic financial institutions between 8am to 3pm.
The move is part of the effort to adopt global best practices for the domestic financial market, said BNM and FMA. This marks the first few initiatives by the Financial Market Committee.