BNM proposes roadmap for transition to the Malaysia Overnight Rate

It proposed ceasing the usage of KLIBOR by 2027 and 2028.

Bank Negara Malaysia (BNM) has proposed the full transition to the Malaysia Overnight Rate (MYOR) and the cessation of the Kuala Lumpur Interbank Offered Rate (KLIBOR).

In a discussion paper published on 27 September, Malaysia’s central bank set out a proposed roadmap for the full-transition, with the permanent cessation of all KLIBOR tenors set for 2028.

BNM also proposed ceasing the usage of KLIBOR in new products by 2027.

It plans to publish MYOR/MYOR-i rates and user guide in 2025.

BNM first introduced the MYOR in 2021, and the Malaysia Islamic Overnight Rate (MYOR-i) in 2022 as new alternative reference rates.

BNM clarified that the publication of the discussion paper does not constitute a public statement or indication that KLIBOR has ceased or will cease permanently or indefinitely. 

“BNM will consider industry feedback before announcing the way forward for KLIBOR,” the central bank said in the paper.

Along with the discussion paper’s publication, BNM said that it is seeking feedback until 27 October 2024 through a Microsoft form (https://forms.office.com/r/BYriH3MTap). Specific queries can be directed to the financial benchmark review team at fbr@bnm.gov.my.