Malaysia, Indonesia, Thailand boost local currency transaction framework

NationThailand/Star/ANN-Feb 18, 2025

Bank Negara Malaysia, Bank Indonesia (BI) and the Bank of Thailand (BOT) have announced the adoption of a harmonized Local Currency Transaction Framework Operational Guidelines (LCTF OG) and the expansion of eligible cross-border transactions under the framework. “The harmonised LCTF OG sets out operating parameters that apply to all participating countries while accommodating specific local regulatory requirements of each jurisdiction,” said Bank Negara in a statement. It added that the latest framework also includes portfolio investments as eligible underlying transactions, in addition to trade in goods and services and direct investments. Investors now have greater opportunities to conduct transactions in local currencies while mitigating exchange rate risks, said the central bank. “Following this latest expansion, Bank Negara, BI and BOT welcome additional qualified commercial banks to participate in and support the expanded LCTF. “These banks will play a vital role in facilitating local currency transactions, leveraging their expertise, operational strength and cross-border networks.” Bank Negara said Malaysia, Indonesia and Thailand have witnessed an upward trend in local currency transactions for bilateral trades since the implementation of the LCTF. Read more at:

https://www.nationthailand.com/business/banking-finance/40046401