Bank Negara Monetary Notes(BNMN)

The main objective of BNMN is to increase efficiency in absorbing excess liquidity in the financial system and thus its impact on domestic financial markets conditions. The inaugural issuance was on 8 December 2006 with an issue size of RM1 billion.

All issuances of existing BNBs and BNNNs will be discontinued, and all maturing issues will be replaced gradually with BNMN of the appropriate structure and maturity term. The maximum maturity of these issuances has also been lengthened from one year to three years but this is not intended to signal any targeted level of long-term profit rates. The Overnight Policy Rate remains the sole indicator of the monetary policy stance while short-term and long-term profit rates at other maturities will continue to be market determined, reflecting overall demand and supply conditions as well as prevailing profit rate expectations in the financial market.

New issuances of BNMN will be conducted through competitive auction via the Principal Dealer network and may be issued either on a discounted or a coupon-bearing basis depending on investors' demand. Discount-based BNMN will be traded using the same market convention as the existing BNB and Treasury Bills while the coupon-based BNMN will adopt the market convention of Malaysian Government Securities.