KUALA LUMPUR, Oct 16 — The Kuala Lumpur Interbank Offered Rate (KLIBOR) will cease to exist with the completion of the transition to the Malaysia Overnight Rate (MYOR) and the Malaysia Islamic Overnight Rate (MYOR-i), which takes effect on January 1, 2029, said Bank Negara Malaysia (BNM).
BNM said the transition is part of Malaysia’s broader financial benchmark reform agenda outlined in BNM’s Financial Sector Blueprint 2022-2026.
“It is also consistent with global financial benchmark reform initiatives. The transition to MYOR and MYOR-i serves as a proactive, forward-looking initiative to ensure the continuous robustness of domestic financial benchmarks,” it said.
MYOR and MYOR-i, introduced in 2021 and 2022, respectively, are transaction-based benchmark rates based upon transactions in active and liquid markets.
BNM also published a roadmap to accelerate the adoption of MYOR and MYOR-i and ensure an orderly transition, where market participants are expected to be operationally ready to offer products referencing MYOR and MYOR-i as part of their standard offering by October 1, 2026.
By July 1, 2027, KLIBOR shall cease to be used in new trades across all products and MYOR-i will be required for all new Islamic products, the central bank said in a statement.
Meanwhile, all legacy KLIBOR contracts will be converted to MYOR/MYOR-i, where possible, and any remaining contracts shall incorporate robust fallback provisions by June 30, 2028.
“BNM, in collaboration with the Financial Markets Committee (FMC), will continue to work closely with industry stakeholders to ensure industry-wide readiness for the transition.
“For this purpose, BNM has established the KLIBOR Transition Coordination Subcommittee and four working groups under the FMC to assist with the implementation effort and support an orderly transition,” it said.
