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Regional Cooperation to promote Local Currency Settlement between Bank Indonesia, Bank Negara Malaysia, Bangko Sentral ng Pilipinas and Bank of Thailand

Ref No : 04/19/04 05 Apr 2019 Embargo : For immediate release    

Chiang Rai, 5 April 2019: Bank Indonesia, Bank Negara Malaysia, Bangko Sentral ng Pilipinas and Bank of Thailand have signed today three pairs of bilateral Letters of Intent (LOIs) on local currency settlement framework:

  • LOI between Benjamin E. Diokno, Governor of Bangko Sentral ng Pilipinas, and Perry Warjiyo, Governor of Bank Indonesia; and
  • LOI between Benjamin E. Diokno, Governor of Bangko Sentral ng Pilipinas, and Nor Shamsiah Yunus, Governor of Bank Negara Malaysia;
  • LOI between Benjamin E. Diokno, Governor of Bangko Sentral ng Pilipinas, and Veerathai Santiprabhob, Governor of the Bank of Thailand;

The three LOIs represent the mutual interests in the potential establishment of local currency settlement frameworks between the respective countries of the four central banks. Bank Indonesia and Bank of Thailand have likewise agreed to start exploring the possibility of expanding the scope of their existing local currency settlement framework.

The use of local currencies in settlement of trade and other areas intends to reduce transaction costs and foreign exchange risks particularly amidst the current volatility faced by currencies in advanced economies. Moreover, the wider use of local currencies in the ASEAN Economic Community enhances economic and financial integration, as well as spurs further development of the foreign exchange and financial markets, within the region.

The progress towards greater financial integration in the region is a welcome development as we witness the expansion of similar arrangements that were launched in 2017 namely, the Memoranda of Understanding (MoUs) concluded between Bank Indonesia and Bank Negara Malaysia, and between Bank Indonesia and Bank of Thailand.

 

Bank Indonesia
Bank Negara Malaysia
Bangko Sentral ng Pilipinas
Bank of Thailand

5 April 2019

Bank Negara Malaysia
05 Apr 2019

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