On 16 October 2025, Bank Negara Malaysia (“BNM”) announced the phased transition from the Kuala Lumpur Interbank Offered Rate (“KLIBOR”) to the Malaysia Overnight Rate (“MYOR”) and the Malaysia Islamic Overnight Rate (“MYOR-i”).

The transition to MYOR and MYOR-i is part of Malaysia’s broader financial benchmark reform agenda outlined in BNM’s Financial Sector Blueprint 2022-2026 and aligns with global financial benchmark reform initiatives.

According to a press release issued by BNM on 16 October 2025, MYOR and MYOR-i, introduced in 2021 and 2022 respectively, are transaction-based benchmark rates based upon transactions in active and liquid markets. This transition follows on from the Discussion Paper on Proposed Full Transition to MYOR and MYOR-i and Cessation of KLIBOR issued by BNM on 27 September 2024.

The key milestones highlighted by BNM for the transition to MYOR and MYOR-i include: 

• 1 October 2026: market participants are expected to be operationally ready to offer products referencing MYOR and MYOR-i as part of their standard offering.
• 1 July 2027: KLIBOR shall cease to be used in new trades across all products.
• 1 July 2027: MYOR-i will be required for all new Islamic financial products.
• 30 June 2028: all legacy KLIBOR contracts will be converted to MYOR/MYOR-i where possible, and any remaining contracts shall incorporate robust fallback provisions.
• 1 January 2029: the transition ends and KLIBOR will cease to exist. 

According to BNM, it will in collaboration with the Financial Markets Committee (“FMC”), continue to work closely with industry stakeholders to ensure industry-wide readiness for the transition. For this purpose, BNM has established the KLIBOR Transition Coordination Subcommittee and four working groups under the FMC to assist with the implementation effort and support an orderly transition.

Please click on the links below to access the documents described below:

MYOR Policy Document issued on 24 September 2021
MYOR-i Policy Document issued on 25 March 2022
Article: Transition from KLIBOR to MYOR and MYOR-i from the Financial Stability Review 1H 2025


Alert by Javene Fan (Senior Associate) of the Banking and Finance Practice of Skrine.