New foreign exchange arrangement expected to boost Thai/Malay leather trade
Hides and leather are one of seventeen product categories that have been put forward by the Thai and Malaysian governments as being eligible for a new foreign exchange account clearing system, aimed promoting trade between the two countries.
Under the Bilateral Payments Arrangement (BPA) system, which will be finalised at the end of August, import/export transactions will be handled in either Thai baht or Malaysian ringgit, thereby avoiding the exchange-rate problems involved in using dollars.
Speaking at the ratification of the new system in the Malaysian capital of Kuala Lumpur last, week, the Thai Commerce Secretary Adisai Bodharamik said that under the BPA, the Bank Negara Malaysia and the Export-Import Bank of Thailand would open credit lines in local currency for the trade activities of both countries. Thailand's Exim Bank would clear transactions for exporters and importers in baht, and the Malaysian central bank would appoint its commercial banks to handle transactions in ringgit. The central banks of the two countries would clear the balances at agreed intervals, such as every three or six months.
The Thai government has promoted a trade account system in an attempt to improve bilateral trade and stimulate sluggish exports.
