BOT, Malaysian central bank ink agreement on currency cooperation
Bank Negara Malaysia and the Bank of Thailand signed a memorandum of understanding (MoU) yesterday on the establishment of a framework for cooperation to promote the settlement of bilateral trade and direct investment in their local currencies.
This arrangement between the two central banks is aimed at enhancing the bilateral trade and investment flows between Malaysia and Thailand. The MoU was signed by Zeti Akhtar Aziz, governor of Bank Negara Malaysia, and Prasarn Trairatvorakul, governor of the BOT.
The MoU signifies the central banks’ efforts to promote the use of Malaysian ringgit and Thai baht by the private sector to settle cross-border trades and direct investment. The arrangement would reduce the risks of exposure to the volatility of global settlement currencies and to lower transaction costs for businesses.
"The establishment of this framework will pave the way for greater financial and economic integration in the Asean region. This bilateral arrangement [will] further strengthen trade and investment flows between Malaysia and Thailand as well as in fostering closer economic linkages for the advancement of the region," Zeti said.
Prasarn said: "This bilateral arrangement marks an important milestone in supporting our commitment to promote the use of local currencies for trade and investment settlement among our Asean community. I believe this will further strengthen cooperation as well as boost economic and investment development in the region."
