Malaysia frees the ringgit

Bank Negara’s FX market reforms are aimed at boosting offshore trade between Malaysia and China. Meanwhile, news of further reforms send the ringgit to a 13-year high.

Malaysia’s central bank, Bank Negara, has made significant reforms to its foreign exchange rules, lifting bans on offshore trading within the goods and services sector.

Three key changes were made allowing the settlement of international trade between residents and non-residents to be conducted in ringgit abolishing the caps on inter-company cross-border foreign currency borrowings and removing limits on anticipatory hedging for current account transactions.

And with rumours that Malaysia will continue on the path to foreign exchange reform, the ringgit has enjoyed a pick-up in performance. On August 19, it reached a 13-year high of 3.1242 against the US dollar -- the strongest level since October 1997 -- and so far this year...

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