KUALA LUMPUR, Nov. 13 (Xinhua) -- The central banks of Malaysia, Indonesia, Thailand and the Philippines signed a memorandum of understanding (MoU) on Friday to promote the wider use of local currencies in cross-border transactions under the Local Currency Transaction (LCT) Framework.
The MoU establishes a framework for the four central banks to promote and facilitate the use of local currencies in settling bilateral transactions between the participating jurisdictions, including trade, investment and other eligible transactions, the central banks said in a joint statement.
The expanded cooperation aims to encourage greater use of local currencies in regional transactions, improving the efficiency of cross-border settlements and reducing costs associated with multiple currency conversions. It is also expected to give businesses and other market participants greater flexibility in managing foreign exchange risks.
The four central banks will continue to work together to advance the development and implementation of the LCT Framework. The initiative is expected to gradually broaden the use of local currencies in regional transactions, supporting economic activities while strengthening regional financial cooperation and resilience. ■
