Business

M'sia central bank takes action against institution

KUALA LUMPUR: Bank Negara Malaysia is taking action against an unnamed financial institution for failing to promptly notify the central bank of its dealers' misconduct involving the fixing of the dollar-ringgit exchange rate.

This comes amid efforts by the central bank to curb offshore trade of the ringgit and stem the fall of the currency.

In a statement yesterday, Bank Negara Malaysia said the financial institution facing action failed to notify it of a "significant audit finding".

"The finding indicates that there were communications with traders from other foreign financial institutions, which included inappropriate references to the fixing rate submission process," it said.

It added that it viewed such reporting breaches seriously, "especially on financial institutions' involvement with offshore ringgit NDF (non-deliverable forward) market or any activities that relate towards market manipulation".

The action could include monetary penalties, issuance of a written order to comply, a public reprimand and a written order to mitigate or remedy such breaches, it said in a statement.

FINES

Last month, two Australian banks - Macquarie Group and Australia and New Zealand Banking Group - offered to pay fines for "cartel conduct" when trading ringgit foreign exchange contracts out of Singapore in 2011.

Last month, Bank Negara Malaysia began trying to force currency traders overseas to stop driving the ringgit lower.

It demanded that banks sign a commitment to cease trading the ringgit on the offshore non-deliverable forward market.- REUTERS

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