Tokyo: Japan and Malaysia have signed the third bilateral swap arrangement (BSA) with a maximum swap amount of US$6 billion, effective from September 18, 2026. The agreement was formalized between the Bank of Japan (BOJ), acting on behalf of the Minister of Finance of Japan, and Bank Negara Malaysia (BNM), as stated by the central bank.

According to BERNAMA News Agency, the BSA aims to deepen financial cooperation between Japan and Malaysia and enhance regional financial stability. The arrangement allows both countries to exchange their respective currencies for the US dollar and enables BNM to exchange the Malaysian ringgit for the Japanese yen.

In addition to the BSA, BNM announced the signing of a Memorandum of Cooperation (MoC) with Japan's Finance Ministry. This agreement initiates a framework to promote the settlement of trade and investment in local currencies. The MoC includes mutual initiatives for promoting the use of local currencies in eligible cross-border transactions, facilitated through information sharing and periodic discussions between Japanese and Malaysian authorities.

The central bank described this collaboration as a significant milestone in strengthening bilateral financial cooperation. The authorities anticipate that this will positively impact trade and investment ties between Japan and Malaysia.