Bank Negara Malaysia, Bank Indonesia, Bank of Thailand, and Bangko Sentral ng Pilipinas Sign Memorandum of Understanding to Strengthen Cooperation under the Local Currency Transaction Framework

It replaces earlier bilateral arrangements among BNM, BI and BOT and adds the Philippines, signalling a broader regional push toward reducing reliance on third-country currencies in cross-border settlement. There is no immediate UK rule change, but the direction of travel matters for firms with ASEAN exposure. Compliance and treasury teams should monitor implementing guidance from each central bank, review FX conversion and settlement workflows, and assess whether local-currency payment, trade finance and hedging capabilities meet client demand.

Client documentation, onboarding, counterparty limits and AML/sanctions controls should remain robust as transaction structures diversify. Risks include fragmented operational readiness, local-currency liquidity constraints, FX volatility and legal/documentation gaps. Opportunities include lower conversion costs, improved FX risk management for corporate clients, and expanded regional payment and trade finance propositions.

Firms should engage correspondent banks and clients, update product governance, and prepare for country-specific operational requirements as the framework is implemented.