KUALA LUMPUR: Bank Negara Malaysia (BNM) is working with its Thai counterpart, Bank of Thailand (BoT) to establish a framework for cooperation to promote the settlement of bilateral trade and direct investment in ringgit and baht.

In a joint statement yesterday, BNM and BoT said a memorandum of understanding (MoU) has been signed to facilitate the establishment of the framework.

“The MoU signifies the central banks’ efforts to promote the use of the ringgit and baht by the private sector to settle cross-border trades and direct investment. This arrangement would reduce the risks of exposure to the volatility of global settlement currencies and also to lower transaction costs for businesses,” said BNM governor Tan Sri Dr Zeti Akhtar Aziz.

“The establishment of this framework will pave the way for greater financial and economic integration in the Asean region.

“This bilateral arrangement would further strengthen trade and investment flows between Malaysia and Thailand as well as in fostering closer economic linkages for the advancement of the region,” she added.

“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 would further strengthen cooperation as well as boost economic and investment development in the region,” said BoT governor Dr Prasarn Trairatvorakul.

This article first appeared in digitaledge Daily, on August 28, 2015.