BNM warns against offshore trading of ringgit in Singapore

The recent introduction of ringgit futures at the Singapore Stock Exchange and the Intercontinental Exchange (ICE) or ICE Futures Singapore is inconsistent with Malaysia’s foreign-exchange administration (FEA) policy and rules.

Bank Negara Malaysia (BNM) noted in a statement yesterday the ringgit remains a non-internationalised currency and, thus, offshore trading of the ringgit — in any form whether as a non-deliverable forward traded out of offshore financial centres or as futures, options and other derivative contracts on exchanges outside of Malaysia — is against Malaysia’s policy. The central bank said the contravention of the FEA rules is an offence under the Financial Services Act 2013 and Islamic Financial Services Act 2013.

“Appropriate action under the law will be taken against any person who does not comply with prevailing rules and regulations. Foreign participants should access the onshore ringgit foreign exchange market to meet their financial needs, either directly with onshore licensed financial institutions or their appointed overseas office,” BNM said. — TMR