towards the use of local currencies to support cross - border settlements for trade and direct investments among the three countries. it is an opportunity to mitigate the impact of volatilities in major trading currencies on regional trade and investment activities. we can recall the global financial crisis, where the tightening of global us dollar liquidity was a contributor to the 19 % contraction of total trade and 11. 5 % contraction of total inward fdi into the region. moreover, an enabling environment for the effective use of local currencies will bring about greater cost efficiency and stability for businesses and increase demand for local currency financial products. that will, in turn, be the impetus to strengthen regional financial markets ’ development. 1 / 2 bis central bankers'speeches i am pleased that the event today is made possible by all three central banks, mutually agreeing to grant regulatory flexibilities to the appointed banks under these frameworks, enabling them to provide a wider range of financial services under their respective jurisdictions. taking this opportunity, i wish to introduce the appointed banks in malaysia for these frameworks, namely, maybank berhad, cimb berhad, rhb berhad, public bank berhad, hong leong bank berhad, bangkok bank berhad, united overseas bank ( uob ) berhad and bank of tokyo - mitsubishi ( btmu ) berhad. the implementation of these frameworks will complement our existing close partnership and cooperation as neighbors, with common objectives and shared aspirations. on this note, i look forward to witness the growth in the use indonesian rupiah, thai baht and malaysian ringgit for cross - border settlement of trade between indonesia and malaysia, and thailand and malaysia, respectively. 2 / 2 bis central bankers'speeches

system, some mncs have successfully upgraded their global invoicing and payment systems to settle trade and working capital in renminbi with their chinese counterparts. this allows for significant cost - savings on foreign exchange transactions in bis central bankers ’ speeches addition to efficiency gains from matching trade receipts to funding working capital requirements. the increased use of the renminbi for their investment activities in china is supported by the flexibility provided in china for movements of global funds in and out of the country. the potential longer - term benefits from using the renminbi - based system for their trade, working capital requirements and fdi in china is thus seen to clearly outweigh the implementation costs. in the more recent decade, financial investments have also gathered momentum as foreign investors commenced investment activities in chinese financial markets since 2003 through the qualified foreign institutional investor ( qfii ) program. wide - ranging measures, including the introduction of china interbank bond market ( cibm ) foreign quota in 2009, the renminbi qualified foreign institutional investor ( rqfii ) in 2011 and the operationalisation of the hong kong - shanghai stock connect in 2014, are all aimed at encouraging greater participation of foreign investors in china ’ s mainland financial markets. at the same time, china is improving the global renminbi settlement and clearing system through a wider network of renminbi clearing banks and the upcoming cross - border interbank payment system ( cips ) to lower the transaction costs for the renminbi relative to other major currencies. currently, there are at least five hundred global investors, including sixty or more foreign central banks and sovereign wealth funds, that have gained direct access to china ’ s financial markets. many more have access through the hong kong - shanghai stock connect. malaysian institutional investors seeking to internationally diversify their investments would need to intensify the learning curve process in the chinese financial markets to realise its benefits. malaysia : a pioneer in the cross - border use of the renminbi malaysia was one of the earliest countries to recognize the potential role of the greater crossborder use of renminbi. given china ’ s significance as malaysia ’ s largest trading partner, the settlement of trade and investment in renminbi significantly lowers costs and promotes greater cross - border trade and investment activity. in turn, fund - raising activity in renminbi has become a means for malaysia to utilise the renminbi liquidity obtained through trade settlements. malaysia has a comparative advantage in this area, as the largest