Axing the export conversion rule would enable exporters to manage the conversion of export proceeds according to their foreign currency cash flow needs. – Bernama file photo
KUALA LUMPUR (March 31): Bank Negara Malaysia (BNM) today announced today the removal of export conversion rule along with a few other liberalisation measures starting April 15, 2021, as part of liberalisation measures aimed at enhancing Malaysia’s position as a Foreign Direct Investment (FDI) destination and global supply chain hub.
Axing the export conversion rule would enable exporters to manage the conversion of export proceeds according to their foreign currency cash flow needs.
Secondly, exporters would also be allowed to settle domestic trade in foreign currency with other residents operating in the global supply chain.
“This move is expected to facilitate natural hedge for exporters and their business partners along the global supply chain to better manage foreign exchange risk,” BNM Governor Datuk Nor Shamsiah Mohd Yunus told an editor briefing session on Tuesday.
She said exporters are also allowed to net-off export proceeds against permitted currency obligations that would enhance business efficiency and cash flow management of exporters.
“Exporters can extend the period of export repatriation beyond six months under exceptional circumstances. Exempt exporters from seeking the Bank’s approval to extend export proceeds beyond six months period for reasons beyond the exporters’ control.
“This may include the situations where buyers are in financial difficulties,” she said.
Lastly, corporates are free to undertake commodity derivatives hedging directly with non-resident counterparties, which would broaden avenues and options for corporates to hedge their commodity price risk.
“These measures are expected to lift investor sentiment and enhance Malaysia’s position as FDI destination,” said Nor Shamsiah. – Bernama
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