BNM, Bank of Korea in currency swap arrangement
KUALA LUMPUR: Bank Negara Malaysia and the Bank of Korea yesterday jointly announced the establishment of a bilateral local currency swap arrangement.
It is designed to promote the use of local currencies for bilateral trade and to strengthen financial cooperation between Malaysia and South Korea, the central bank said.
This arrangement allows for the exchange of local currencies between the two central banks of up to five trillion won (RM15 billion).
The effective period of the arrangement is three years, and could be extended by a mutual agreement between the central banks.
Bank Negara chief Tan Sri Dr Zeti Akhtar Aziz said: "As the region moves towards greater integration, the currency swap arrangement will contribute towards strengthening the economic and financial interlinkages between the two countries.
"Firms from both countries will have greater flexibility to use local currency for settlement of bilateral trade and investment activities."
Bank of Korea governor Dr Choongsoo Kim said the currency swap arrangement between the two countries would be an important stepping stone in balancing the strength of bilateral ties between the real and financial sectors, leading to even closer economic cooperation.
"The two central banks have agreed to work together to achieve this goal, bringing about tangible outcomes such as the use of currency swap funds in local currency trade settlement," he added. Bernama
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