Bank Negara Malaysia, Bank Indonesia and the Bank of Thailand adopt harmonised Local Currency Transaction Framework guidelines and add portfolio investments

Bank Negara Malaysia, Bank Indonesia and the Bank of Thailand announced the adoption of harmonised Local Currency Transaction Framework Operational Guidelines and expanded the scope of eligible cross-border transactions under the framework to encourage greater use of local currencies. The harmonised operational guidelines consolidate previously bilateral guidance and are intended to improve consistency, scalability and efficiency, with streamlined processes and greater transparency for participating financial institutions and users. Operating parameters apply across participating countries while accommodating each jurisdiction’s local regulatory requirements. The expanded framework makes portfolio investments an eligible underlying transaction alongside trade in goods and services and direct investments, giving investors additional options to transact in local currencies while mitigating exchange rate risks. Following the expansion, the three central banks invited additional qualified commercial banks to participate in and support the framework, positioning them to facilitate local currency transactions through their operational capabilities and cross-border networks.