Kuala Lumpur, Nov 18 (Reuters) - Malaysia’s central bank has introduced a new avenue for local banks to obtain or invest in reminbi and for banks in China to provide ringgit trade financing.
Bank Negara Governor Zeti Akhtar Aziz said on Monday that the bank will use its own access to the interbank market in China to offer liquidity facilities in the Malaysian interbank market.
Banks in China will be allowed to provide ringgit trade financing in China, Zeti added in her speech at the opening of the central bank’s representative office in Beijing.
Bank Negara and the People’s Bank of China have signed a Memorandum of Understanding to establish a cross-border collateral arrangement that will enable financial institutions access to the Malaysian central bank’s liquidity facilities. (Reporting By Siva Sithraputhran; editing by Simon Cameron-Moore)