Malaysia central bank says it will transition to transaction-based benchmark market rates

Malaysia’s central bank said on Thursday that it will transition from the Kuala Lumpur Interbank Offered Rate (KLIBOR) to the Malaysia Overnight Rate (MYOR) and the Malaysia Islamic Overnight Rate (MYOR-i).

By the end of the transition, the KLIBOR will cease to exist effective from Jan 1, 2029, Bank Negara Malaysia said in a statement.

The MYOR and MYOR-i, introduced in 2021 and 2022 respectively, are transaction-based benchmark rates based upon transactions in active and liquid markets.

Market participants are expected to be operationally ready to offer products referencing MYOR and MYOR-i as part of their standard offerings by Oct 1, 2026, the central bank said.

The KLIBOR will cease to be used in new trades across all products, while the MYOR-i will be required for all new Islamic products by July 1, 2027.

“By June 30, 2028, all legacy KLIBOR contracts will be converted to MYOR/MYOR-i where possible, and any remaining contracts shall incorporate robust fallback provisions,” the central bank added.

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The central bank said it “will continue to work closely with industry stakeholders to ensure industry-wide readiness for the transition”. REUTERS