Foreign Exchange Policy Liberalisation for Multilateral Development Banks and Qualified Non-Resident Development Financial Institutions

Bank Negara Malaysia (BNM) today announced a liberalisation of foreign exchange policy (FEP) for multilateral development banks (MDBs) and qualified non-resident development financial institutions (DFIs). The liberalisation aims to facilitate their investment in key growth areas in Malaysia. This includes the electrical and electronics (E&E) industry, technology adoption, sustainability and data centres.

The MDBs and qualified non-resident DFIs^[1] will now be able to:

• issue ringgit-denominated debt securities for use in Malaysia; and
• provide ringgit financing to resident entities.

This will allow both financiers and businesses to structure financing in ringgit for domestic projects while reducing the risk of currency mismatch.

Bank Negara Malaysia Governor Dato’ Seri Abdul Rasheed Ghaffour said, ‘The liberalisation would better facilitate greater participation from global investors in key growth areas in Malaysia. This is in line with greater demand and interest by international financial institutions to finance high-value investment projects in Malaysia that we have observed in the recent period.’

In addition, the MDBs and qualified non-resident DFIs can share their technical expertise, particularly in blended finance, that would complement existing domestic players in meeting financing demand to support strategic investments and climate transition efforts in Malaysia.

By fostering a more facilitative investment environment, the liberalisation initiative can also increase issuances and participation from issuers and international investors, which would benefit the domestic bond and sukuk market in terms of greater depth and vibrancy.

For more information, please visit www.bnm.gov.my/fep