The Malaysia-China General Chamber of Commerce (CMCHAM) said Wednesday that it hopes Malaysian companies will make good use of the bilateral currency swap agreement with China and settle transactions in RMB to reduce transaction costs. The Malaysia-China General Chamber of Commerce also called for further increasing the bilateral currency swap line in the future to promote regional financial stability.
The Malaysia-China General Chamber of Commerce pointed out that the RMB/ringgit exchange rate is relatively stable, and the exchange of ringgit and RMB as business settlement risks are low, which will also help the country’s enterprises trading with China, especially smes, to reduce costs.
Bank Negara Malaysia reached a bilateral currency swap agreement with the People’s Bank of China in 2009 and officially launched RMB settlement in 2012. According to the Malaysia-China General Chamber of Commerce, citing data from Bank Negara Malaysia, Malaysia’s RMB foreign exchange trading volume reached 997.7 billion yuan in 2015. Although it fell back for a while, it has risen again since 2019 and reached 621.8 billion yuan in 2020.
President of Malaysia-China General Chamber of Commerce Lo Kwok-siong pointed out that from the above data, there is still room for improvement in Malaysia’s renminbi trading volume.
Bilateral trade between Malaysia and China totaled more than $131.2 billion in the first eight months of this year, up 21.1 percent from the same period last year, Lu said. He called on the Malaysian government to actively enter into a larger bilateral currency swap agreement with China to save foreign exchange settlement costs for merchants and governments in both countries and further encourage more local large, small and medium enterprises to adopt the renminbi for trade settlement.