In a significant stride towards fostering financial collaboration, Bank Indonesia (BI), Bank Negara Malaysia (BNM), and the Bank of Thailand (BOT) have recently solidified their partnership through the formal signing of three bilateral Memorandum of Understanding (MoUs) on August 25, 2023. These pivotal MoUs are collectively aimed at fortifying the Framework for Cooperation, designed to facilitate and amplify bilateral transactions conducted in local currencies between the nations.
The momentous signing ceremony witnessed the esteemed presence of key figures including Bank Indonesia Governor Perry Warjiyo, Bank Negara Malaysia Governor Abdul Rasheed Ghaffour, and Bank of Thailand Governor Sethaput Suthiwartnarueput. This noteworthy event unfolded on the sidelines of the ASEAN Finance Ministers and Central Bank Governors’ Meeting, held in the vibrant city of Jakarta, Indonesia.
With a shared commitment to reinforcing the utilization of local currencies for bilateral transactions, the three central banks are now poised to elevate the scope of their collaboration. Beyond conventional trade and direct investments, this expanded framework is set to encompass a broader spectrum of eligible cross-border transactions. This holistic expansion will be rolled out in a gradual manner, while simultaneously harmonizing with ongoing cross-border payment initiatives. The overarching goal is to establish more accessible and streamlined mechanisms for local currency settlements, thus enhancing efficiency.
Anticipated outcomes of these momentous MoUs encompass the consolidation of cross-border economic pursuits, fortification of regional financial market stability, and the cultivation of deeper local currency markets within the participating countries. It is noteworthy that these agreements supersede earlier MoUs pertaining to local currency settlement frameworks, previously inked on August 27, 2015, and December 23, 2016, by the three central banks.
This recent triumvirate of agreements holds the promise of invigorating cross-border financial endeavors, fostering resilience within the regional financial landscape, and catalyzing the growth of local currency markets. As the wheel of collaboration turns, these central banks are laying the foundation for heightened financial cooperation and economic dynamism in the Asia-Pacific region.