Financial benchmark reforms are taking place across various jurisdictions to enhance the integrity and reliability of interest rate benchmarks in line with the recommendations of the Financial Stability Board FSB. Key recommendations include the development of a nearly risk free alternative reference rate ARR and the strengthening of existing interbank offered rates IBOR in respective jurisdictions.
Similar to other jurisdictions the Malaysian ARR namely the Malaysia Overnight Rate MYOR is based on overnight transactions in the interbank market and will operate alongside the existing Kuala Lumpur Interbank Offered Rate KLIBOR. The availability of both benchmarks provides the market with flexibility to choose either MYOR or KLIBOR as the reference rate for pricing financial instruments.
This policy document outlines the benchmark design methodology and governance framework to ensure the integrity and credibility of MYOR.
This document belongs to Bank Negara Malaysia (BNM). Full access to the original source is available here: https://www.bnm.gov.my/banking-islamic-banking
