The cabinet has approved Asean's joint plans to push for the use of local currencies for payments in the region.
According to deputy government spokeswoman Rachada Dhnadirek, the cabinet approved the draft of the "Asean Leaders' Declaration on Advancing Regional Payment Connectivity and Promoting Local Currency Transaction" yesterday.
The Asean leaders are scheduled to consider endorsing the draft at the 42nd Asean Summit in Labuan Bajo, Indonesia, on Thursday.
The draft was developed in line with the objectives of the Asean Economic Community Blueprint 2025, which aims to create a tightly integrated and strong Asean economy that supports sustainable economic expansion in a financially inclusive environment.
The key features of the draft include the push for regional payment connectivity and the promotion of local currency transactions.
The regional payment connectivity efforts call for promoting cross-border payment innovation to facilitate seamless and secure payment; improving infrastructure to enable cross-border payment systems to work together; and facilitating electronic payments to ensure the cross-border payment system is convenient, fast and secure.
The promotion of local currency transactions calls for supporting the establishment of a local currency transaction task force; supervising financial sectors to reduce regional vulnerability to external volatility; and enhancing the use of local currencies to promote trade and investment within the region.
According to Ms Rachada, Asean leaders appointed the finance ministers and central bank governors of Asean nations to oversee the implementation of promoting the interconnectivity of payment systems in the region, as well as consider developing a framework to promote local currency transactions, while coordinating closely with relevant agencies.
She said the draft agreement shows the political will of Asean leaders to promote electronic payment and cooperation in linking regional payment systems using technology, as well as developing related infrastructure and supporting the establishment of a local currency transaction task force to build consensus.
However, the draft agreement contains no provisions that constitute legal obligations between countries and has not been signed, said Ms Rachada.
This means the draft agreement is not a treaty under international law, she said.