Today, in conjunction with the opening of the Beijing office, Bank Negara Malaysia wishes to announce further measures to reinforce the progress that has been made, and as part of the efforts to promote bilateral trade and investment. i. To facilitate more effective renminbi liquidity management by our financial institutions in Malaysia, Bank Negara Malaysia is introducing of a Renminbi Liquidity Facility (RLF) to licensed onshore banks. This facility aims to enhance renminbi liquidity in the domestic market by providing an additional avenue for the licensed onshore banks to obtain or invest RMB with the Bank. The Bank, through its own access to the interbank market in China, will offer these liquidity facilities via the renminbi/ringgit foreign exchange market, and the renminbi money and repurchase markets in the Malaysian interbank market;  ii. Second, non-resident financial institutions that meet the prudential requirements will be permitted to offer ringgit trade financing, in collaboration with resident financial institutions. In this regard banks in China will also be allowed to provide ringgit trade financing in China; and  iii. Finally, in recognition of the growing significance of regionally active financial institutions and the increased financial inter-linkages between our two economies as well as in mutual recognition and acceptance of each others’ securities, Bank Negara Malaysia and the People’s Bank of China has today signed a Memorandum of Understanding to establish a cross-border collateral arrangement that will enable financial institutions access to the central bank’s liquidity facilities. Let me now conclude my remarks.

The most pressuring challenge for the world economy is to achieve a sustained and inclusive economic growth. Beyond the short-term volatility in the international financial markets, the prospects of the Asian region are well anchored on solid fundamentals, and underpinned by our economic and policy flexibility and years of reforms. Collectively, the Asian region will be an important growth center in the world economy contributing to global stability. China in particular has been successful in rebalancing its economy amidst structural adjustments and reforms that brings its economy to a sustainable growth trajectory. With the progressive move by China towards the internationalisation of their financial system in the years to come, there will be increased interconnectedness of the Chinese financial system with the rest of the region and the world and consequently, a wider role of the renminbi as it continues to grow in importance in international trade and financing activity. It would be inevitable that the renminbi will become an important reserve currency in the international financial system. Against this development, the opening of the Bank Negara Malaysia’s Beijing Representative Office builds on the deep ties that has already been forged and signifies our confidence and commitment to this future. The Beijing office will also serve as a key point for the Chinese financial community to engage Malaysia and understand the opportunities available in our countries. Finally, I would like to express our great appreciation to the People’s Bank of China for their approval and support for the Bank’s representative office.