Malaysia’s financial market is open and easily accessible through its large network of Licensed Onshore Banks (LOB). Non-residents may also undertake FX transactions involving ringgit directly overseas via the Appointed Overseas Offices (AOO) of the licensed onshore banks.

A non-resident may undertake the following FX transactions via a LOB or an AOO:

FX Transaction for Own Account

• Buy or sell foreign currency (FC) against ringgit on spot basis for any purpose.
• Buy or sell FC against ringgit on forward basis based on underlying obligation such as ringgit bond holdings, equity holdings and net open position of palm oil futures. A ringgit derivatives contract other than exchange rate offered by a resident is considered as part of underlying obligation. There is also no restriction to unwind or cancel the forward transaction for any underlying, except portfolio investment.

FX Transaction on Behalf

• A non-resident entity can enter into FX transaction involving ringgit (spot or forward basis) on behalf of its resident and non-resident related entity.
• A non-resident institutional investor (NRII), including custodian/trust bank, can enter into FX transaction on behalf of its non-resident clients. The NRII may also participate in the Dynamic Hedging Framework to actively manage its ringgit FX exposure.
• A non-resident financial institution can enter into FX transaction on behalf of its non-resident clients for settlement of international trade in goods or services with a resident.

Apart from FX transaction, any non-residents (with or without underlying) can transact ringgit-denominated plain vanilla interest rate derivative with a licensed onshore bank or an AOO.