Malaysia c.bank unveils new FX, derivatives measures

KUALA LUMPUR Jan 30 (Reuters) - Malaysia's central bank said on Monday it plans to further develop its domestic financial markets by allowing licensed onshore banks to trade foreign currencies against other currencies and offer ringgit-based interest rate derivatives to non-bank non-residents.

The measures, which come into effect on Tuesday, will help enhance competitiveness in the southeast Asian economy, the central bank said in a statement on Monday.

"The above measures will contribute towards increasing the liquidity, depth and participation of a wider range of players in the domestic financial markets," the central bank said.

The central bank also said residents are allowed to convert their existing ringgit or foreign currency obligations into another currency. For a text on the announcement, see

The measures are part of a 10-year financial sector blueprint to open up the industry to more foreign investment as the government tries to put the economy back on investors' radar ahead of general elections expected this year.

"These measures are designed to further liberalise the foreign exchange and money markets, bringing local banks on par with their peers overseas," said Azrul Azwar Ahmad Tajudin, chief economist at Bank Islam. (Reporting by Niluksi Koswanage; Editing by Kim Coghill)