BNM refining proposal to enhance use of ringgit, rupee in trade

KUALA LUMPUR: Bank Negara Malaysia is fine-tuning a proposal from the Reserve Bank of India (RBI) to develop a Local Currency Settlement Framework to enhance the use of the ringgit and rupee in bilateral trade, says the investment, trade and industry ministry.

In a written response on the Dewan Negara website today, the ministry said this is expected to support and strengthen bilateral trade growth between Malaysia and India, while also expanding opportunities for entrepreneurs and investors in both countries.

It said trade in the rupee could potentially have a positive impact on trade between the two countries due to the reduction in dependency on the US dollar.

“This could directly reduce foreign currency transaction costs, which would in turn lead to more competitive pricing of goods,” said the m inistry in response to a question from A Kesavadas Nair on whether trade in the rupee would reduce the cost and price of goods, following the success of Prime Minister Anwar Ibrahim’s visit to India, which secured an investment commitment of RM4.5 billion.