SGX now clears non-deliverable ringgit, baht swaps

COMPANIES and banks who want to hedge their exposure between the Thai baht and Malaysian ringgit through non-deliverable interest rate swaps (NDIRS) are now able to do so directly at the Singapore Exchange (SGX), instead of going through their banks.

The move benefits banks, which can take some credit exposure off their books to meet regulatory requirements.

Currency swaps allow parties to exchange fixed or floating interest rate payments in one currency or across two currencies. Corporates go to banks for swap transactions to hedge against sharp currency depreciations, to ensure steady cashflow from their overseas units.