Malaysia asks foreign banks to stop trading offshore ringgit NDFs

Hong Kong

FOREIGN banks have been asked to make a written commitment to Malaysia's central bank to stop trading the ringgit in the offshore non-deliverable forwards (NDF) market in the bank's latest move to protect a weakening currency, banking sources said.

Foreign banks have been sent a form letter to sign, which asks them for an "unconditional representation and commitment" to stop trading in any offshore Malaysian ringgit non-deliverable forwards or offshore derivatives.

The letters were sent by banks in Malaysia which hold bonds and other Malaysian assets as custodians for foreign banks. The form letters are addressed t…