BNM eases hedging restrictions and corporates win

Stephen Innes, a senior currency trader and analyst at Oanda in Singapore, noted bond market outflows had been “massive” following last year’s move to slash the offshore NDF market. And he suspects the central bank saw the “writing on the wall”
when it saw a staggering level of flows out of  MGS (Malaysian government securities) last month, and it was clear that the central bank “needed to implement some changes”.

Foreigners dumped a record RM26.2 billion of local bonds in March, bringing down the total foreign ownership to 38.5% from about 47% in November 2016, Malaysian newspaper the Star reported on April 15
However, “increasing their effective hedges to 100% in one go was much better than anyone had expected Innes said, adding it signalled the BNM’s willingness to implement further market changes.

Tags:, , ,