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Negara Issues Offshore Ringgit Warning
Malaysia’s central bank – Bank Negara Malaysia (Negara) – has issued a statement warning that offshore trading of the ringgit contravenes Malaysian laws. The statement was issued to the recent introduction of ringgit futures at the Singapore Exchange (SGX) and the Intercontinental Exchange (ICE), with Negara claiming that these products are “inconsistent with Malaysia’s foreign exchange administration (FEA) policy and rules”. Negara adds: “The Malaysian ringgit is a non-internationalised currency and thus, offshore trading of ringgit, in any form whether as a non-deliverable forward traded out of offshore financial centres or as a futures, options and other derivative contracts on exchanges outside of Malaysia, is against Malaysia’s policy.” In the statement, BNM reminds market participants that failure to comply with the FEA rules is an offence under the Financial Services Act 2013 and Islamic Financial Services Act 2013.

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