KLIBOR Cessation & Transition to MYOR & MYOR-i

Kuala Lumpur Interbank Offered Rate (KLIBOR) Cessation &

Full Transition to MYOR and MYOR-i

Dear Valued Customers,

 

Following the official announcement by Bank Negara Malaysia (BNM) on 16 October 2025, the Kuala Lumpur Interbank Offered Rate (KLIBOR) will be phased out beginning 1 July 2027. From 1 January 2029, KLIBOR will be fully replaced by two transaction-based overnight benchmark rates:

 

• Malaysia Overnight Rate (MYOR) – For conventional financial products.
• Malaysia Islamic Overnight Rate (MYOR-i) – For Shariah-compliant financial products.

 

Hong Leong Bank and HLB Islamic (“the Bank”) are fully committed to ensuring a seamless, stable, and orderly transition for all our customers and counterparties.

 

Frequently Asked Questions (FAQ)

 

1. What is driving this change from KLIBOR to MYOR/MYOR-i?

This transition is part of Malaysia’s broader financial benchmark reform agenda outlined in BNM’s Financial Sector Blueprint 2022-2026, which mirrors international efforts to shift away from submission-based rates (like LIBOR or SIBOR) toward transparent, transaction-backed rates.

 

2. What are MYOR and MYOR-i?

MYOR (introduced in 2021) and MYOR-i (introduced in 2022) are transaction-based benchmark rates calculated from actual, verifiable unsecured overnight Ringgit lending and Shariah-compliant transactions between banks in active and liquid markets. Unlike KLIBOR, which is forward-looking and based on daily bank submissions, MYOR and MYOR-i are anchored entirely in actual historical market volume, making them much more robust, reliable, and secure against market manipulation.

 

3. How does this transition impact the customers?

Customers utilizing the Bank's financial offerings including deposits, loans, investment accounts, or other KLIBOR-linked products must migrate to alternative benchmark rates. To ensure alignment with these replacement rates, all relevant contractual terms, pricing conventions, and profit or interest rates will be updated prior to the permanent discontinuation of KLIBOR at the end of 2028.

 

4. What happens to existing (legacy) KLIBOR-linked loans, financing, or derivatives?

If you hold an active legacy contract that references KLIBOR, the Bank will work closely with you to convert your contracts to reference MYOR, MYOR-i or Standardised Base Rate (SBR) latest by 30 June 2028. For unique or complex contracts where a direct transition is not immediately possible, robust fallback rate clauses will be integrated into your legal agreements to ensure stability when KLIBOR ceases on 1 January 2029.

 

For customers holding an active Housing or Shop Loan referencing KLIBOR, the Bank will transition your specific reference rate to the Standardised Base Rate (SBR) latest by 30 June 2028. This adjustment ensures long-term contract stability prior to the permanent discontinuation of KLIBOR on 1 January 2029. Affected borrowers will receive a formal notification from the Bank well ahead of this rate conversion.

 

To prepare your businesses and accounts effectively, please take note of the industry-wide milestones mandated by BNM and implemented by the Bank:

 

5. What do I need to do right now?

At present, no immediate action is required from retail or corporate clients. However, we highly encourage our corporate and institutional clients to review your current portfolio of loans, financing, derivatives, or investments to gauge your total exposure to KLIBOR.

 

The Bank will reach out to affected clients directly with detailed, specific transition plans in due course.

 

For more information, please refer to the BNM publication on MYOR transition