CIMB Bank and Standard Chartered Bank Malaysia have completed the first Malaysian ringgit-US dollar cross-currency transaction referencing the USD Secured Overnight Financing Rate (SOFR), which is to succeed the USD London Interbank Offered Rate (LIBOR).

The US$100 million MYR KLIBOR-USD SOFR deal followed Standard Chartered’s conclusion of the first renminbi cross-currency swap referencing the CNY repo rate and the USD SOFR as well as the first Singapore dollar-US dollar SOFR deal in the region.  

“A liquid interest rate derivatives market that adopts new globally accepted reference rates is crucial to allow Malaysian institutions to hedge effectively and efficiently,” notes Sylvia Wong, head of financial markets, ASEAN excluding Singapore, at Standard Chartered.

CIMB Bank had earlier concluded its first local interbank USD SOFR interest rates swap centrally cleared through the British clearing house LCH. Its subsidiary CIMB Thai Bank had also transacted its maiden overnight index swap referencing the Thailand  Overnight Repurchase Rate as well as medium-term interest rate swap trades.