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Information on Local Currency Settlement Framework

Release Date: 30 Aug 2019

As part of the strengthening regional financial integration with countries in the ASEAN region, Bank Negara Malaysia established Ringgit-Baht Local Currency Settlement Framework (LCSF) with Bank of Thailand (BOT) and Ringgit-Rupiah LCSF with Bank Indonesia (BI) in March 2016 and December 2017, respectively.

The frameworks aim to encourage the use of local currencies for settlement of trade and investment among the three countries hence reducing reliance on major currencies. In effect, Malaysian entities can access financial services that offer products denominated in Rupiah and Baht in Malaysia to manage their FX risk better, and vice versa.

Further details of the Ringgit-Baht LCSF and Ringgit-Rupiah LCSF are in the attached info-sheet.

© Bank Negara Malaysia, 2019. All rights reserved.