Kuala lumpur: UOB Malaysia, in collaboration with RHB Banking Group and Malayan Banking Bhd (Maybank), has executed the first Malaysia Overnight Rate (MYOR)-based three-month interbank money market transaction. This significant transaction, involving a two-day lookback calculation convention, marks a pivotal development in Malaysia's financial sector.

According to BERNAMA News Agency, the transaction was completed on August 14, 2026, and is considered a milestone in the evolution of Malaysia's money market. It supports the industry's efforts to adopt risk-free rate-based market conventions. The transaction was led by UOB Malaysia and executed with RHB and Maybank, highlighting strong collaboration among the three banks.

Christina Cheah, UOB Malaysia's country head of Corporate and Investment Banking, expressed that the successful execution of this transaction underscores the partnership among the banks in advancing the country's financial markets. By establishing a transparent benchmark for MYOR-based funding, the transaction contributes to improved price discovery and confidence in adopting risk-free rate conventions. Cheah emphasized UOB Malaysia's commitment to partnering with local market participants, sharing regional expertise, and supporting initiatives that align Malaysia's financial ecosystem with global standards.

The joint statement from the banks indicated that the transaction enhances transparency and price discovery by making funding levels and spreads accessible to a broader network of market participants. This approach contrasts with bilateral transactions, where pricing information is limited to the counterparties involved. By establishing a transparent MYOR funding curve and an observable reference point for three-month interbank funding, the transaction improves visibility into funding spreads over MYOR and banks' borrowing costs. This, in turn, supports more efficient pricing across the wider market.

Nurjesmi Mohd Nashir, RHB Banking Group's managing director of Group Wholesale Banking, reiterated RHB's commitment to supporting Bank Negara Malaysia's (BNM) efforts to develop a deeper and more efficient MYOR market. He emphasized RHB's role in the continued development of Malaysia's financial markets.

Farid Kairi, Maybank's deputy group chief executive officer of Global Banking and managing director, noted that the transaction is a crucial first step in establishing a foundation for deeper liquidity. It sets the stage for more MYOR-linked solutions and supports robust price discovery for market participants.

MYOR was introduced by the central bank in September 2021 as Malaysia's Alternative Reference Rate (ARR). It is calculated as the volume-weighted average rate of actual unsecured overnight Malaysian Ringgit interbank transactions, providing a robust benchmark grounded in deep and liquid overnight funding markets. The transition to MYOR aligns Malaysia with other major financial markets, including Singapore, Japan, Switzerland, the United States, and the United Kingdom.