(File pix) Bank Negara Malaysia says the foreign exchange market remains open and it is ready to provide liquidity to ensure an orderly market if necessary. Pix by Aizuddin Saad

KUALA LUMPUR: BANK Negara Malaysia said there is no change in its Foreign Exchange Administration (FEA) rules, and that it only reenforces existing rules that prohibit facilitation of any ringgit offshore trading, including the ringgit nondeliverable forward (NDF) market.

“There is no introduction of any new measures. The ringgit remains a non-internationalised currency and, thus, any offshore trading of ringgit, such as ringgit NDF, is not recognised.

“The bank is taking measures to re-enforce existing rules that have in been in place to prohibit facilitation of ringgit NDF,” said Bank Negara in a statement yesterday.

Foreign reports said the ringgit slumped in the offshore market on Friday as surging United States yields and concerns over president-electDonald Trump’s trade policies led investors to flee regional assets.

The ringgit fell 0.2 per cent to 4.28 against the US dollar in the local market, while the currency dropped as much as 3.7 per cent to 12-year lows of 4.5396 in the NDF market, adding to its 2.5 per cent overnight decline.

Traders and investors without access to Malaysia’s onshore currency market use the NDF market to speculate on the currency’s direction and to hedge their exposures.

Bank Negara reminded market participants to observe the FEA rules.

“The Malaysian licensed banks must avert from facilitating any foreign exchange transaction that could be related to offshore ringgit NDF market activities,” it said.

It added that Malaysia’s foreign exchange market remained open and the central bank was ready to provide liquidity to ensure an orderly market if necessary.

“Malaysia continues to welcome real investments and provide all avenues for foreign exchange transactions and hedging requirements onshore.

“The public is advised to approach Malaysian licensed banks for all foreign exchange requirements. Foreign fund and asset managers should contact Malaysian licensed banks for advice and execution of any foreign exchange transactions.

“All Malaysian licensed banks will continue to facilitate customers’ request for foreign exchange services subject to compliance to FEA,” added Bank Negara.