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  • 04. Dezember 2020

    Bank Negara Malaysia Repurchase Agreement

    The central bank stated that traders will also have access to a wider range of eligible securities in resp transactions and will have less paperwork in the implementation of multi-currency repurchase operations on Ringgit securities. Financial institutions also play an important role in preventing risk detection and effective implementation of financial intermediation activities, the Central Bank said. In the coming challenges, Negara Bank reaffirmed its commitment to provide the wholesale interbank market with sufficient liquidity to ensure continued financial intermediation that will support viable households and businesses in the context of the current COVID 19 crisis. The central bank said on Friday that its latest measures, including auto-repo operations, adjustments to the reserve legal obligation (SRR), major exchange facilities and the purchase of government bonds, had ensured sufficient ringgit and borrowing liquidity. The maximum duration of pension operations was 365 days. In August, the Central Bank issued revised guidelines for sector consultation, which proposed „new flexibilities,“ such as a longer tenor limit and a wider range of repurchase securities. KUALA LUMPUR, Nov 12 (Reuters) – Malaysia`s central bank on Tuesday extended the maximum content of a pension repurchase agreement or repo to five years. The trade policy document applies to all market players who are licensed banks and investment banks and does not apply to repo transactions carried out by foreign branches of licensed banks and investment banks and repo transactions with BNM. It applies to repo transactions on Ringgit and non-Ringgit repo securities and to repurchase transactions, including all intentions to sell or purchase repo securities directly completed, with the intention of redeeming or reselling them at a later date.

    Repo Securities refers to the underlying securities of the pension transaction. The content of a transaction takes precedence over its form to determine whether a transaction is regulated in this strategy document. „However, it also recognized that financial markets around the world remain vulnerable to changes in investor moods and that, as a result, the liquidity of the U.S. dollar remains a key factor to watch closely,“ the central bank said. On November 12, 2019, Negara Malaysia Bank („BNM“) released a strategy document entitled „Repurchase Agreement transactions“.- It came into effect that day. The pension policy document applies to licensed banks and licensed investment banks and replaces the repurchase transaction policy document (BNM/HR/PD 032-3) issued on 31 July 2015 (hereafter referred to as „replaced document“). Three banks would cite initiatives to encourage participation in sale and repurchase agreements among Islamic market players. The central bank also noted that the recent resumption of repo`s interbank activities has allowed banks to better manage liquidity. „This strategy document sets out the Bank`s revised requirements and expectations for market participants who conduct repo transactions on ringgit and non-ringgit-repo and auto-repo operations … Bank Negara Malaysia said in a statement bit.ly/33FNifr.


    Verfasst von Stefan Oberhauser

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