Citigroup Said to Stop Submissions for Two Key Rates in Malaysia

Citigroup Said to Stop Submissions for Two Key Rates in Malaysia
The Petronas Towers, center, stand in the central business district in Kuala Lumpur, Malaysia. Photographer: Lam Yik Fei/Bloomberg

Citigroup Inc., the third-largest U.S. bank, stopped contributing to two benchmark rates set in Malaysia, two people with knowledge of the matter said.

The lender’s submissions for Malaysian ringgit interest rate swaps and the ringgit spot reference rate against the dollar were halted last week, said the people, who asked not to be identified as they aren’t authorized to speak publicly on the matter.

Citigroup’s withdrawal follows similar halts by HSBC Holdings Plc, UBS AG and other global banks from rate-setting panels as regulators worldwide consider litigation and fines in response to rigging scandals. Barclays Plc, UBS and Royal Bank of Scotland Group Plc have already been penalized about $2.5 billion for manipulating London Interbank Offered Rates.

James Griffiths, a Hong Kong-based spokesman for Citigroup, declined to comment on the lender’s exit. The New York-based bank continues to contribute to the Kuala Lumpur Interbank Offered Rate, according to data compiled by Bloomberg.

The ringgit swap and exchange rates are used by traders for hedging against interest rate and currency movements and speculating on their direction. Excluding Citigroup, 11 banks now contribute to fixing the rates daily, the data show.

Submissions Wane

Citigroup in September said it withdrew from the panel of lenders that sets the euro interbank offered rate, citing a dearth of trades between banks in the region. Rabobank International, the biggest Dutch savings bank, exited the panel in January, while Deutsche Bank AG said in February that it would end participation in some Euribor rates.

The British Bankers’ Association, the lobby group that oversees Libor, is cutting currencies and maturities included in the benchmark where there is insufficient trading data to estimate borrowing costs accurately.

The BBA will stop quoting rates in Australian, New Zealand and Canadian dollars as well as Danish and Swedish currencies by June. The group will stop publishing interim maturities, such as the two-week, four-month, and eight-month tenors for all currencies at the end of May.

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