Currency Swap/Role of BNM/Statutory Reserves

Currency Swap

  • Contract between 2 parties that have borrowed money denominated in different currencies to exchange one currency for another
  • Swap a loan in one currency for a loan in another currency without any currency/foreign exchange risk
  • Exchange of interest payments

Steps involved in a currency swap

  1. Spot of exchange of principal
  2. Exchange if interest rate payments
  3. Reexchange of principal at original spot rate

Bank Negara Malaysia and Monetary Regulations

  • Central bank ordinance (1958), Central bank is to promote monetary stability and to develop a sound financial structure

Transmit Monetary Policies

  1. Statutory Reserve Requirements (SRR)
  2. Statutory Liquidity Requirements (SLR)
  3. Discount Operations
  4. Open Market Operations
  5. Direct Borrowing and Lending

Develop a well organized FX/MM

  1. Efficient information and settlement system
  2. Monitors both MM/FX market to reduce excessive exposure
3 Responses to “Currency Swap/Role of BNM/Statutory Reserves”
  1. Lidia says:

    are U work in Telecommunication Industry too ? neither do I…In My country the telecommunication Industry begin move on/booming.the rate is very competitive.that’s why so many provider growth every year….nice to have U as My friend,your Blog is nice.pls come and add me as your friend…I’ll be $$$end U a big $$$mile…have a nice week

  2. jamesesz says:

    Where are you from Lidia? Indonesia? Will be checking out your blog soon! He he

  3. matt says:

    This blog’s great!! Thanks :).

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