Bank Negara and BI ink deals to strengthen cooperation

KUALA LUMPUR: Bank Negara and Bank Indonesia (BI) have entered into agreements to further strengthen bilateral monetary and financial cooperation between the central banks.

The agreements were signed by BNM Governor Nor Shamsiah Yunus and her counterpart Governor Perry Warjiyo at a bilateral meeting held here yesterday.

It involved local currency bilateral swap agreement (LCBSA), which would enable both central banks to access foreign currency liquidity from each other if needed; and memorandum of Understanding (MOU) to forge closer cooperation on innovation in payments and digital financial services, as well as surveillance on anti-money laundering and counter financing of terrorism (AML/ CFT).

The LCBSA allows for the exchange of local currencies between the central banks of up to Rm8bil or IDR28 trillion (around Us$2bil). This would complement efforts to support the wider usage of local currencies to facilitate cross-border economic activity between Malaysia and Indonesia. The effective period of the arrangement is three years and it can be extended by mutual agreement of the central banks, Bank Negara said in a statement.

Moving in tandem with the increasing interdependence of technological advancements in financial services, the MOU reaffirmed the commitment of both central banks in supporting the development of payment systems and digital financial innovation as part of initiatives to advance financial development and integration between the two countries.