KUALA LUMPUR – Bank Negara Malaysia (BNM) and the Bank of Thailand (BOT) on October 26 announced the further expansion of the ringgit and baht settlement framework effective from December 1, reported Bernama.
In a joint statement, it said the latest framework includes an expansion of eligible users to include Malaysians and Thais who reside in either country, as well as additional foreign exchange policy flexibility, such as simplified documentation requirements.
“This is part of the continuous effort to facilitate wider use of local currencies for settlement of trade and direct investment between Malaysia and Thailand.
“The Local Currency Settlement Framework between Malaysia and Thailand was last expanded on Jan 2, 2018, after its initial launch on March 14, 2016, in accordance with the memorandum of understanding signed between BNM and the BOT on August 27, 2015,” the statement said.
BNM deputy governor Datuk Abdul Rasheed Ghaffour said the expansion would provide greater accessibility to the ringgit-baht-denominated financial services for individuals as well as businesses in both countries.
“The framework also now allows Thai individuals residing in Malaysia to avail themselves to these services.
“The expansion will boost future economic activities between our two countries,” he said.
Meanwhile, BOT deputy governor Mathee Supapongse noted that the latest expansion of the ringgit-baht settlement framework will benefit people and businesses in both Malaysia and Thailand.
“It will further facilitate cross-border financial transactions including through the recently launched cross-border Quick Response (QR) payment linkage between our two countries.
“We believe this will pave the way for wider use of local currencies and greater financial integration within the ASEAN region,” he said.
Following the latest expansion, BNM and the BOT have also appointed additional qualified commercial banks in both countries to participate in and further support the expanded ringgit-baht settlement framework.
The additional appointed banks are HSBC Bank Malaysia Bhd and Standard Chartered Bank Malaysia Bhd in Malaysia.
In Thailand, the additional appointed banks are the Hong Kong and Shanghai Banking Corporation Ltd (Bangkok) and Standard Chartered Bank (Thai) PCL.