General sentiment of Brexit and US rate hikes is lingering in the market. Yesterday's RMB fix also was one of the lowest (I forgot since when).
MGS outflow.

Edit: Ah the fix news is above by one of the posters.

This post has been edited by Sesshoumaru: Oct 11 2016, 08:41 PM

Been a long day at work today. Now I can't share specifics on the happenings today (seems like there is some leak anyway, on a high-level basis), but I'll share on the mechanics of onshore and offshore USDMYR for everyone's benefit. Some of you surprisingly have a good rough understanding on the inner workings though.

The offshore USDMYR is a NDF - Non-deliverable Forward. This means there is no settlement between the 2 currencies and is only traded offshore (onshore banks/FI/residents are NOT allowed to trade in USDMYR NDFs). The NDFs are net-settled in USD, depending on the USDMYR fixing (VWAP of onshore trades from 8.00 a.m. to 3.00 p.m., published at 3.30 p.m.) 2 days before maturity date. The fixing used to be at 11.00 a.m., but due to high concentration of trades around that period caused heavy bias and thus BNM switched methodology.

Pure specs on USDMYR NDFs are not affected by any settlement challenges as any of their punts are just net settled in USD. However, the hedgers will.

Foreign/off-shore govvies (MGS) buyers often hedge their FX exposure via NDFs as they do not have access to onshore swaps. However, this only hedges their FX exposures - they still must come to the onshore market for settlement, as this allows actual deliveries of USD <---> MYR.

BNM dislike of the offshore USDMYR NDF market is understandable, as it runs independently and is not within their jurisdiction or control.

This is just a problem due to information being strewn everywhere.

See this. http://www.bnm.gov.my/index.php?ch=en_pres...ac=4316&lang=en
"Residents without domestic ringgit borrowing shall continue to enjoy flexibility of investing in foreign currency assets both onshore and abroad up to any amount"

No.

http://www.bnm.gov.my/documents/2016/faq_i...cial_market.pdf

See item 22.

So there won't be an immediate boost right of the bat with the existing balances, mandatory speaking anyways. Only if the corps decide to just liquidate all FC into MYR (voluntary) will the immediate shoring of reserves happen.

Edit: Some typos and additional info.

This post has been edited by Sesshoumaru: Dec 3 2016, 11:14 AM

You think the banks won't perform their due d when sending out funds?

Look at the banks that didn't do its proper due d. What happened to them?

One would think they would've learned not to incur millions in fines.

Actually, how it works is that as long as you have any form of MYR borrowings regardless of amount, you are subjected to that MYR 1 mio limit. It is not calculated anything like what you've mentioned.

Now I'm no expert when it comes to individuals (I handle corps instead), but I believe there are exceptions to what qualifies as MYR borrowings. Credit card might be excluded, as well as housing/car loans (first 2 of those loans I think). The loaded forumers here might be able to give more solid sharing.

Thanks for the correction. 1 each it is then.

AVFAN, so besides CC, 1 housing loan and 1 car loan....
-no other borrowings, free to invest
-any other borrowings, only 1k remaining = limit 1 mio
-any other borrowings even with 10 mio remaining = limit 1 mio