KUALA LUMPUR (Feb 8): Bank Negara Malaysia (BNM) says the changes to operational arrangements between the central bank and onshore banks on Feb 6 are not an easing of restrictions as reported by a newspaper today.

Instead, the changes are merely a refinement of the existing operational arrangements, said BNM.

"Onshore banks have always been free to trade in any amount in the domestic foreign exchange interbank market," it said in a statement today.

BNM said the refined operational arrangement relates to export proceeds conversion rules.

"Onshore banks can now utilise export proceeds conversion of less than US$1 million per transaction to meet their clients' foreign currency requirements without referring to BNM," it said.

"This allows the onshore banks to better manage their conversion operations during the day without compromising on the objective of the measures announced on Dec 2, 2016," it added.

On Dec 2, BNM had, through the Financial Markets Committee, announced several measures to enhance the liquidity of foreign exchange market after its clampdown on offshore ringgit speculation in the non-deliverable forward market the month before.

The measures included allowing local fund managers to freely hedge their US dollar and renminbi exposures up to a limit of RM6 million per client per bank, and for any fund manager to actively manage their foreign exchange exposure of up to 25% of invested assets.

Exporters, on the other hand, have to convert 75% of their export proceeds to ringgit instead of keeping them overseas or in foreign currencies, with a special 3.25% deposit rate reward.