KUALA LUMPUR: Bank Negara Malaysia (BNM), Bank Indonesia (BI) and Bank of Thailand (BOT) yesterday jointly announced the launch of three local currency settlement framework, a move aimed at promoting the wider use of local currencies to facilitate and boost trade and investment in these countries.
All three frameworks – rupiah-ringgit framework; rupiah-baht framework; and expanded baht-ringgit framework – will be effective from Jan 2, 2018.
This is in accordance with two bilateral memorandums of understanding on local currency settlement framework that were signed between the three central banks, respectively, on Dec 23, 2016.
The establishment of these frameworks marked a key milestone in strengthening regional financial cooperation between BI, BNM and BOT, they said in a joint statement yesterday.
To operationalise the framework, the central banks have appointed banks that fulfilled key qualifications to facilitate bilateral trade.
Appointed banks were those, which were among the resilient and healthy banks in each country, have experience in facilitating trade between the two countries, experience in business relations with the bank in the counterparty country and have broad customer base and branch offices in the home country, the statement said.
BI and BNM have appointed CIMB Bank Bhd, Hong Leong Bank Bhd, Malayan Banking Bhd, Public Bank Bhd, RHB Bank Bhd, PT. Bank Rakyat Indonesia, PT. Bank Mandiri, PT.
Bank Central Asia, PT. Bank Negara Indonesia, PT. Bank CIMB Niaga and PT. Bank Maybank Indonesia to support the operationalisation of the rupiah-ringgit framework.
Meanwhile, BI and BOT appointed PT. Bank Rakyat Indonesia, PT. Bank Mandiri, PT. Bank Central Asia, PT. Bank Negara Indonesia, Bangkok Bank PCL from Indonesia, and Bangkok Bank PCL, Bank of Ayudhya PCL, Kasikornbank PCL, Krung Thai Bank PCL and Siam Commercial Bank PCL from Thailand to support the operationalisation of the rupiah-baht framework.
In addition to the launch of the local currency settlement framework between BI, BOT and BNM, the baht-ringgit settlement framework between BNM and BOT was also expanded to include direct investment to enrich existing trade transactions. The framework was first launched on March 14, 2016.
BNM and BOT have appointed CIMB Bank Bhd, Malayan Banking Bhd, Public Bank Bhd, RHB Bank Bhd, Bangkok Bank Bhd, Bank of Tokyo-Mitsubishi UFJ Malaysia Bhd, United Overseas Bank Bhd, Bangkok Bank PCL, Bank of Ayudhya PCL, CIMB Thai PCL, Kasikornbank PCL, Krung Thai Bank PCL, Siam Commercial Bank PCL and United Overseas Bank (Thai) PCL to support the ringgit-baht framework. — Bernama