By BERNAMA / Pic By MUHD AMIN NAHARUL

BANK Negara Malaysia (BNM) and Bank Indonesia have agreed on the exchange of local currencies of up to RM8 billion or 28 trillion rupiah.

Both parties inked a local currency bilateral swap agreement last Friday, which will enable them to access foreign-currency liquidity from each other if needed.

“This will complement efforts to support the wider usage of local currencies to facilitate cross-border economic activity between Malaysia and Indonesia,” BNM said in a statement.

The effective period of the arrangement is three years and it can be extended by mutual agreement.

The agreement was signed by BNM governor Datuk Nor Shamsiah Mohd Yunus and Bank Indonesia governor Perry Warjiyo to further strengthen bilateral monetary and financial cooperation.

The governors also inked a memorandum of understanding to forge closer cooperation in developing payment and digital financial services, as well as surveillance on anti-money laundering and counter financing of terrorism.

This reaffirmed their commitment to supporting the development of payment systems and digital financial innovation in tandem with the increasing interdependence of technological advancements in financial services.

It is part of initiatives to advance financial development and integration between the two countries.

Recent economic and financial developments, including in the areas of Islamic finance, social financing and financial market development, were discussed at the bilateral meeting held in Kuala Lumpur.

“The central banks expressed their commitment in strengthening cooperation between both nations to further enhance financial sector development in achieving sustainable economic progress,” BNM noted. — Bernama