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Harambe:  (Vietnam) Central bank joins regional payment connectivity expansion | Vietnam+ (8/25/23)

(Vietnam) Central bank joins regional payment connectivity expansion | Vietnam+ (8/25/23)

Jakarta (VNA) – The State Bank of Vietnam (SBV), has officially joined the Regional Payment Connectivity (RPC) initiative. 

The recent development is an expansion of the Memorandum of Understanding on Cooperation in Regional Payment Connectivity (MOU RPC) initiated by the central banks of Indonesia, Malaysia, Philippines, Singapore, and Thailand on the sidelines of the G20 Leaders’ Summit on 14 November 2022 in Bali.

On the sidelines of the 10th ASEAN Finance Ministers’ and Central Bank Governors’ Meeting (AFMGM) on August 25 in Jakarta, Vietnam’s central bank signed the Supplemental Pages of the MOU RPC.

The RPC initiative was established to strengthen and enhance collaboration on payment connectivity through the development of faster, cheaper, more transparent, and more inclusive cross-border payments.

According to the MoU, member central banks agreed to promote cross-border payment connectivity based on the application of such payment methods as QR Code, instant payment, and other payment models, as well as cooperation in monitoring and building a sound risk management mechanism in line with the legal framework of member countries. Mechanisms for implementing MoU include dialogue, monitoring, evaluation, and information exchanges.

Within the framework of the Working Group on the ASEAN Payments System (WC-PSS), the members highly appreciated this initiative of the five ASEAN central banks (ASEAN5) and encouraged the participation of ASEAN members.

Appreciating the potential benefits and opportunities from the initiative, the SBV coordinated with ASEAN5 central banks to complete the procedures to officially become the 6th member of the MoU, which demonstrates its commitment to cooperation and integration in the payment field, in line with the orientation of the Vietnamese Government and central bank as well as the current trend of promoting cross-border payments.


Harambe:  Indonesia Inks Local Currency (Rupiah)Transaction Pact with Malaysia, Thailand | Jakarta Globe (8/25/23)

Jakarta. The Indonesian central bank on Friday signed local currency transaction pacts with its Malaysian and Thai counterparts, respectively, in a bid to reduce reliance on American dollars.

The freshly inked deal is an expansion of the local currency settlement, namely the use of the countries’ respective currencies for trade and direct investment. For instance, an Indonesian importer may pay in rupiah or baht when importing goods from Thailand. In other words, businesses do not need to use American dollars as an intermediary.

Indonesia has previously established local currency settlement cooperation with ASEAN member states Thailand and Malaysia. According to Bank Indonesia Governor Perry Warjiyo, Jakarta and the said two countries want this use of local currencies to go beyond trade and investment; thus the memorandum of understanding (MoU) signing.

As part of the new MoU, Indonesia — together with Malaysia and Thailand– have agreed on facilitating more efficient cross-border payments. Perry said that the three countries would also use local currencies for financial asset transactions, including government bonds and equities.

“So we use local currencies bilaterally, not only for trade and investment. But also for cross-border payments. [The local currency cooperation] will also include the transactions in financial assets,” Perry added.

Perry revealed that Indonesia-Malaysia’s trade and investment settled in ringgit or rupiah amounted to $1.5 billion equivalent per month. Thailand-Indonesia’s monthly local currency trade and investment settlements already totaled almost $600 million.

Abdul Rasheed Ghaffour, the governor of the Malaysian Central Bank, also commented on the local currency transaction agreement.

“The signing of the MoU today represents all commitments to further accelerate efforts to put in place the necessary frameworks and also market infrastructure to promote settlements in local currencies. Settlements need to be easy, safe, and cost-efficient for businesses as well as individuals,” Bank Negara Malaysia’s Ghaffour told the press.

Government data shows Indonesia-Thailand trade already amounted to $19.2 billion last year. Indonesia’s bilateral trade with close neighbor Malaysia reached $27.9 billion in 2022.

Harambe:  Iranian Foreign Ministry: Iraq releases significant portion of frozen funds | Shafaq News (8/25/23)

The Iranian Foreign Ministry announced on Friday that Iraq has released a substantial amount of Iranian funds that were previously frozen. This move comes as part of an agreement reached between Tehran and Washington, mediated by a third party, which involves the release of Iranian prisoners and the unfreezing of funds.

Ali Bagheri Kani, the Political Assistant to the Iranian Foreign Minister, stated to the the semi-official “Mehr” news agency that, in addition to South Korea, a substantial portion of Iran’s funds was also held in Iraq.

He elaborated, “Our agreement with the American side to release Iranian funds frozen in South Korea triggered discussions about the release of Iranian funds in Iraq. The process of their release has already commenced.”

Kani went on to detail, “Over the last three weeks, we have successfully unlocked nearly seven times the total funds we utilized in Iraq for economic activities last year. We anticipate this momentum to expedite further.

Earlier this month, official Iranian sources disclosed the intricacies of a mediated agreement between Tehran and Washington, involving a prisoner exchange and the release of Iranian funds frozen in South Korea and Iraq.

A source familiar with the accord reported to Iran’s official news agency “IRNA”, “The terms of this agreement stipulate the liberation of five American prisoners in exchange for the freedom of five Iranian detainees in the United States.”

The source provided insight, noting that “in addition, approximately $6 billion of Iranian assets frozen in South Korea are set to be released, along with a substantial share of Iranian funds held in Iraq’s TBI Bank.” The source further indicated that “the preliminary stages for the unfreezing of Iranian assets in European financial institutions are already underway.”

Furthermore, Prime Minister Mohammed Shia Al Sudani disclosed on July 11 that ongoing negotiations with the US aim to settle Iran’s outstanding payments for gas imports from Iraq. The sum totals 9.25 billion euros.

Al Sudani revealed Iraq’s contribution, stating, “We have already disbursed around 1.842 billion euros within the first seven months of the current government term, per our agreed-upon mechanism.”

Moreover , PM Al Sudani informed that a joint delegation from Iraq’s central bank (CBI) and the Iraqi Trade Bank embarked on a mission to Oman, working towards a consensus on the transfer of these funds to Oman, in coordination with the US Treasury.