KUALA LUMPUR: Bank Negara announced further steps to increase market liquidity, ahead of an expected decision by FTSE Russell in September on whether to retain ringgit bonds in its index.
Bank Negara Malaysia said in a statement on Friday, businesses will be given greater flexibility to hedge and principal dealers will be required to quote off-the-run bonds to deepen domestic markets.
It said the central bank will also improve ringgit accessibility after onshore trading hours via Appointed Overseas Offices.
Malaysia is stepping up efforts to deepen its financial markets after FTSE Russell said in April it may drop ringgit debt from its index due to concerns about liquidity.
Policymakers rolled out several initiatives in May, including increasing the availability of off-the-run bonds to be borrowed via repo and improving the delivery mechanism for sovereign bond futures settlement.- Bloomberg