CIMB Bank and Standard Chartered Bank Malaysia jointly announced today the completion of the first MYR KLIBOR – USD SOFR cross currency basis swap transaction. The USD100 million trade is the first MYR – USD cross currency transaction referencing the USD Secured Overnight Financing Rate (“SOFR”), which is the Risk Free Rate to succeed the USD London Interbank Offer Rate (“LIBOR”).
The successful conclusion of this transaction coincides with the Malaysian Financial Markets event to be held on 18th September, the Malaysia IBOR Transition. Organised by the Asia Securities Industry and Financial Markets Association (ASIFMA), in collaboration with the Financial Markets Association of Malaysia (FMAM), the event will include a keynote address by Bank Negara Malaysia Assistant Governor Aznan Abdul Aziz.
“We are extremely pleased to extend Standard Chartered’s global commitment towards working with financial markets participants and clients in navigating the global benchmark reforms. Standard Chartered had previously concluded the first CNY cross currency swap referencing the CNY repo rate and the USD SOFR and the first SGD SORA – USD SOFR cross currency swap in the region. With this MYR transaction, being another first MYR cross currency swap referencing USD SOFR, Standard Chartered continues our pioneering efforts in the Asian cross-currency derivatives markets.
“This underscores Standard Chartered’s dedication and enthusiasm towards the development of Malaysian financial markets by working closely with our clients, industry bodies and regulators. A liquid interest rate derivatives market that adopts new globally accepted reference rates is crucial to allow Malaysian institutions to hedge effectively and efficiently. We will continue to contribute to this development by leveraging on Standard Chartered’s rich global experience,” said Sylvia Wong, Head of Financial Markets (ASEAN excluding Singapore) at Standard Chartered.
“As one of the largest financial market participants in the local currency space in Malaysia and ASEAN, CIMB is delighted to reinforce our readiness in handling the IBOR transition in our key markets in ASEAN. In addition to this landmark transaction, CIMB Bank had also concluded our first local interbank USD SOFR interest rates swap that is centrally cleared through the LCH. Furthermore, our subsidiary CIMB Thai Bank had also transacted its maiden THB THOR (Thailand Overnight Repurchase Rate) Overnight Index Swap (OIS) and medium term interest rate swap trades.
“Global benchmark reforms have impacted various ASEAN local currency markets either directly or indirectly. Divergence in the development paths and the distinctive nuances in each market poses unique challenges to each local financial market. With our extensive ASEAN footprint and our deep involvement in the development of the respective local financial markets, CIMB is well positioned to contribute towards the local market development agenda,” added Chu Kok Wei, Group Treasurer of CIMB Group.