Bank Negara Malaysia (BNM) has implemented the Local Currency Trade Settlement Frameworks with Bank Indonesia (BI) and the Bank of Thailand (BOT), while also expanding the BNM–BOT Framework.

This involves the establishment of the rupiah-ringgit framework, rupiah-baht framework, and the improvement of the baht-ringgit framework, effective Jan 2, 2018.

This will improve the facilitation of trade between the three countries, and enable the settling of trade and direct investments using the three countries’ local currencies.

"I look forward to witnessing the growth in the use of the rupiah, baht and ringgit for cross-border settlement of trade between Indonesia and Malaysia and, Thailand and Malaysia, respectively," BNM Governor, Tan Sri Muhammad Ibrahim said.

He said this would also complement the partnership among the three countries which share common objectives and aspirations.

Muhammad said Indonesia and Thailand are important partners to Malaysia, both in trade and direct investments.

"In 2016, Malaysia shared a bilateral trade volume of US$13.8 billion with Indonesia and US$13 billion with Thailand. However, only 5.8 percent and 11.4 percent of our trade with Indonesia and Thailand, respectively, were settled in local currencies," he said.

He added that last year, intra-ASEAN investments rose to US$24 billion and accounted for 25 percent of total foreign direct investment flows into the region.