Against the backdrop of the Asian financial crisis that commenced in the second half of 1997, the affected economies have seen the crisis deepen and spread on an unexpected scale. As part of its response to the crisis, the Malaysian government implemented a series of measures to regain monetary independence and insulate the Malaysian economy. On September 1, 1998, Malaysia imposed capital controls and on the following day pegged the exchange rate at RM3.80 to US$1.00.
The exchange control measures are expected to be temporary and the Government will in all probability remove them once the global financial environment, particularly the currency and financial markets, return to normal. By and large, these measures are not targeted at the operations of the long-term investors and will not impinge on rights already granted to such investors.
Citibank Berhad has compiled this practical guide to help answer some of the questions most commonly asked by our customers that have dealings in Malaysia in some form or another. These pages are not intended as legal advice and is based on our understanding of the new exchange control policies as stated up to September 18, 1998.