THE Malaysian financial market is among the more developed in Asia and will grow in breadth and maturity to become an important gateway to the Asean markets.
Recommendations in the new financial sector blueprint released yesterday focuses on developing the money, foreign exchange and government securities markets as its core initiatives to develop the entire financial industry.
Among others, it recommends offering a wider range of liquid ringgit and multi-currency money market instruments to promote an efficient and competitive money market.
These include reducing counterparty risks and enhancing liquidity in money market transactions by promoting greater volume of securities and collateralised transactions.
This may also include issuance of securities in regional currencies out of the Labuan IBFC.
The blueprint also recommends that the investor base for the government securities market be broadened by exploring cost-effective investment and distribution channels for direct retail participation in the debt securities and sukuk markets, especially in the government securities market.
For businesses which expand overseas, the blueprint recommends more participation in the onshore foreign exchange market.
The blueprint also supports the use of regional currencies for trade settlements and direct investment activities to reduce transaction costs and risks in regional cross-border transactions - which will lead to the creation of new asset classes in the market.
The masterplan also calls for infrastructure and institutional arrangements that will support efficient and cost-effective foreign currency trading, payments and settlements onshore.
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