Expansion Of Local Currency Framework Between BNM And Bank Indonesia

Bank Negara Malaysia and Bank Indonesia announced the expansion of the ringgit-rupiah settlement framework. The framework was first launched on 11 December 2017 in accordance with the Memorandum of Understanding between Bank Negara Malaysia and Bank Indonesia that was signed on 23 December 2016. This expansion, which will be effective from, 2 August 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, Bank Negara Malaysia and Bank Indonesia 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.

The appointed banks are as follows:

Additional appointed banks:
HSBC Bank Malaysia Berhad
MUFG Bank Malaysia Berhad

Existing appointed banks:
CIMB Bank Berhad
Hong Leong Bank Berhad
Malayan Banking Berhad
Public Bank Berhad
RHB Bank Berhad  

Additional appointed banks:
PT Bank HSBC Indonesia
MUFG Bank Ltd, Jakarta branch

Existing appointed banks:
PT Bank Rakyat Indonesia (Persero) Tbk
PT Bank Mandiri (Persero) Tbk
PT Bank Central Asia Tbk
PT Bank Negara Indonesia (Persero) Tbk
PT Bank CIMB Niaga Tbk
PT Bank Maybank Indonesia Tbk

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