Malaysia’s Cbank to launch reference rate

Malaysia’s central bank will launch an alternative to its interbank benchmark rates that will offer market participants more flexibility and hedging options, it said on Friday.

The alternate rate, called the Malaysia Overnight Rate (MYOR), will run in parallel to the existing Kuala Lumpur Interbank Offered Rate (KLIBOR), Bank Negara Malaysia said in a statement.

The MYOR rate will be periodically reviewed to ensure that “the financial benchmark rates remain robust and reflective of an active underlying market,” it said.

The central bank said the alternate rate was part of a global move to “facilitate usage of benchmark rates that are more robust and based upon transactions in active, liquid markets.”

The new rate will be administered and calculated by the central bank as the volume-weighted average rate of unsecured overnight ringgit interbank transactions, including the bank’s overnight monetary operations.

– Reuters