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

[KUALA LUMPUR] 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