The Bank Negara Malaysia (Photo: malaysiandigest.com)Kuala Lumpur (VNA) - The central banks ofMalaysia, Indonesia and Thailand established local currency settlement frameworkson December 11 to promote trade and investment activities.
The three banks said in a joint statement that theframeworks are applied between Bank Negara Malaysia (BNM) and Bank Indonesia(BI), and between Bank of Thailand (BOT) and BI, as part of efforts to promotewider use of local currencies to facilitate trade and investment in thesecountries.
The framework establishment marks a key milestone instrengthening regional financial cooperation between the BI, BNM and BOT, itadded.
All three currency settlement frameworks for rupiah-ringgit,rupiah-baht and baht-ringgit will be effective from January 2, 2018.
BNM Governor Muhammad Ibrahim said that Indonesia andThailand are important partners to Malaysia both in trade and directinvestment. He hopes to see increasing use of the three countries’ currencies incross-border trade.
In 2016, Malaysia posted bilateral trade of 13.8billion USD with Indonesia and 13 billion USD with Thailand. However, only 5.8percent and 11.4 percent of the respective figures were settled in localcurrencies, according to the governor.
He said this means an enormous business opportunityfor the financial sector that has yet to be tapped.
He noted Maybank, CIMB, RHB, Public Bank, Hong LeongBank, Bangkok Bank, United Overseas Bank and Bank of Tokyo-Mitsubishi have beenappointed as eligible banks for the settlement.-VNA
VNA
