PETALING JAYA: Bank Negara Malaysia (BNM) and Bank Indonesia (BI) today announced the expansion of the ringgit-rupiah settlement framework.
The framework was first launched on Dec 11, 2017 in accordance with the memorandum of understanding between BNM and BI that was signed on Dec 23, 2016. This expansion, which will be effective from Aug 2, 2021, is part of the continuous effort to facilitate wider use of local currencies for settlement of trade and direct investment between Malaysia and Indonesia.
The expanded framework now includes direct investment, income and transfer, in addition to trade as eligible underlying transactions. It also includes expansion of eligible users of the framework such as individuals, and additional foreign exchange policy flexibilities such as more simple documentation requirement to facilitate the operationalisation of the framework.
Given the expansion, BNM and BI have also appointed additional qualified commercial banks in both countries to support the operationalisation of the expanded ringgit-rupiah settlement framework. In general, the appointed banks are experienced in facilitating trade and direct investment between the two countries, have a wide customer base and have established strong business relationships with banks in the counterparty country.
In Malaysia, the additional appointed banks are HSBC Bank Malaysia Bhd and MUFG Bank Malaysia Bhd, while the existing appointed banks are CIMB Bank Bhd, Hong Leong Bank Bhd, Malayan Banking Bhd, Public Bank Bhd, and RHB Bank Bhd.