Malaysia, Thailand, Indonesia sign MoUs on local currency settlement framework

Bank Indonesia, Bank Negara Malaysia, and the Bank of Thailand Friday concluded the signing of two bilateral Memoranda of Understanding (MoUs) on using local currencies for trade, a key milestone in regional central banking cooperation, Thai News Agency (TNA) reported.

Bank Negara Malaysia and the Bank of Thailand, respectively, signed MoUs with Bank Indonesia on a framework of cooperation to promote the settlement of bilateral trade and direct investment in their local currencies.

Following the successful implementation of a similar arrangement between Bank Negara Malaysia and the Bank of Thailand earlier this year, these bilateral arrangements will efficiently facilitate economic and financial activities among the three countries.

The enabling environment will benefit businesses by reducing transaction costs and enhancing efficiency of trade and investment settlements. Amidst the current volatile global financial market conditions, this will offer businesses more options in choosing currencies for trade settlement, according to TNA.

The Framework will pave the way for wider usage of local currencies in the ASEAN Economic Community and spur further development of the regional foreign exchange and money markets, in support of wider economic and financial integration.

The MoUs were signed by Bank of Indonesia Governor Agus D.W. Martowardojo, Bank Negara Malaysia Governor Datuk Muhammad Ibrahim and Bank of Thailand Governor Veerathai Santiprabhob.

-- BERNAMA