Bank Negara Malaysia announces liberalisation of foreign exchange policy for multilateral development banks and qualified non-resident development financial institutions

18 December 2024

On 15 November 2024, Bank Negara Malaysia (“BNM”) announced a liberalisation of its foreign exchange policy (“FEP”) for multilateral development banks (“MDBs”) and qualified non-resident development financial institutions (“DFIs”). The liberalisation is aimed at supporting investments in key areas such as the electrical and electronic industry, technology adoption, sustainability, and data centres.

With this change, MDBs and qualified DFIs will be able to issue ringgit-denominated debt securities and provide ringgit financing to resident entities, reducing currency mismatch risk for domestic projects. BNM’s liberalisation of its FEP aligns with increasing demand by and interest from financial institutions to finance high-value investment projects in Malaysia. Additionally, MDBs and DFIs will be able to share technical expertise in blended finance to support strategic investments and climate transition efforts.

The liberalisation is expected to enhance the vibrancy and depth of Malaysia’s bond and sukuk market, attracting greater participation from global investors.