International Engagements

Enhancing Partnerships amid Geopolitical Shifts

2025 was a significant year for Malaysia and BNM as Malaysia assumed the ASEAN and ASEAN+3 Chairmanship. BNM continued to engage actively in international discussions on issues affecting Malaysia and the global economy.

As ASEAN Chair, BNM together with the Ministry of Finance, led key meetings and initiatives under the ASEAN Finance Track. These focused mainly on strengthening regional financial integration and stability. Meanwhile, under the ASEAN+3 Finance Process, Malaysia worked alongside China as co-chairs to strengthen financial safety nets. Key milestones achieved during the ASEAN and ASEAN+3 Chairmanship are elaborated in the feature article ‘Malaysia’s 2025 ASEAN/ASEAN+3 Chairmanship: Advancing Inclusive and Sustainable Economic Growth for ASEAN and Malaysia’.^[1]

Through the Executives’ Meeting of East Asia-Pacific Central Banks (EMEAP), BNM worked closely with members to identify key policy challenges and policy responses over the medium term. These included areas such as the implications of digitalisation and artificial intelligence, as well as climate-related risks. We also discussed initiatives to further enhance the effectiveness of EMEAP.

We participated actively in key international standard-setting and policy platforms, including the Bank for International Settlements (BIS), Basel Committee on Banking Supervision (BCBS), Financial Stability Board (FSB), International Association of Insurance Supervisors (IAIS) and the Islamic Financial Services Board (IFSB) – amplifying Malaysia’s voice in shaping global regulatory developments. These platforms enable us to align our policies with evolving international standards. Additionally, these platforms support collective efforts that strengthen the resilience and competitiveness of our financial system.

In parallel, we continued to strengthen bilateral engagements with peers and partners. These bilateral engagements are integral for several reasons. First, they enable us to exchange views on challenges and emerging policy issues in the wider economy and financial sector. Secondly, they create opportunities to explore solutions to enhance financial and economic resilience. Lastly, these engagements deepen our relationships with key stakeholders – making Malaysia a credible, trusted and well-connected partner in the global financial community.

Driving Connectivity, Resiliency and Inclusivity Across Borders

In the area of connectivity, BNM worked closely with regional and global partners to transform cross-border payments, helping make seamless transactions a reality.^[2]

BNM is actively involved in Project Nexus – a multilateral initiative to build a scalable and interoperable infrastructure for seamless cross-border payments. The project aims to make cross-border payments as seamless and efficient as domestic ones. Progress is well underway, with the system expected to go live in 2027. 

We are an active contributor to the Alliance for Financial Inclusion (AFI), a network we have been part of since 2009 and has hosted its headquarters in Kuala Lumpur since 2015. BNM chairs AFI’s Global Standards and Policy Committee and contribute knowledge, experience, and policy insights across multiple working groups. These include leading policy discussions across areas such as open finance, MSME digitalisation, financial capability, and national strategy development. We also actively facilitate knowledge exchange on a wider range of financial inclusion topics, including hosting in-person study visits by member countries. In 2025, BNM received AFI’s inaugural Honorary Recognition Award. The award recognises our long-standing leadership and support for AFI’s institutional development.

BNM also worked closely with the World Bank Group, the Organisation for Economic Co-operation and Development (OECD) and the ASEAN Working Committee on Financial Inclusion (WC–FINC) to deepen evidence-based policymaking in financial inclusion. These collaborations provided access to shared knowledge, best practices and emerging international standards. Together, they help build BNM’s institutional capacity and ensure Malaysia stays aligned with regional and global developments.

Continued Commitment to Prevent Financial Crimes

At BNM, we are committed to supporting global efforts to protect the integrity of the financial system.^[3] We are an active member of the Financial Action Task Force (FATF) and the Asia/Pacific Group on Money Laundering (APG). We do so by helping to shape global standards to combat financial crimes – contributing to updates to FATF standards, reports on proliferation financing and sanctions evasion, and guidance on financial inclusion and de-risking.

In preparing Malaysia for the FATF’s Mutual Evaluation Exercise,^[4] we actively engaged with key stakeholders, including relevant domestic agencies, several FATF member countries, as well as the FATF and APG Secretariat. These engagements were essential to ensure our readiness for the evaluations. As part of our FATF obligation, we also contributed to peer evaluations of other member countries’ measures, helping to strengthen global implementation of anti-money laundering, countering financing of terrorism and countering proliferation financing (AML/CFT/CPF) standards. These evaluations reinforce our commitment to a safer, more transparent financial system, and safeguard the integrity of the global financial ecosystem.

Elevating Malaysia’s Global Leadership in Islamic Finance

Malaysia continued to hold a leading position in Islamic finance. The country shapes global standards and drives thought leadership that enhance the resilience, integrity and international credibility of the Islamic finance ecosystem.

As Chair of the Executive Committee of IFSB, BNM led efforts to further strengthen IFSB’s institutional foundation. The Executive Committee is a key component of the IFSB governance structure that provides advisory to the IFSB Council on strategic matters. The Committee also makes decisions on operational matters. At the standard-setting and technical level, we play an active role in developing prudential standards, providing technical assistance and capacity-building to other jurisdictions, and reinforcing sound governance and institutional effectiveness of IFSB.

We played our role as a member of the International Islamic Liquidity Management Corporation (IILM) by providing strategic advice and support to strengthen its governance framework and internal controls. Our support includes steering best-practice frameworks, guiding decision-making and facilitating the IILM’s business transformation phase. This helped IILM become among the top three Sukuk issuers globally in 2025, contributing to enhanced global Islamic liquidity for Islamic banks and financial institutions.

Advancing Sustainable Finance through Collaboration

BNM continued to contribute to regional and global efforts in advancing a more climate-resilient financial system.^[5] We actively participate and contribute to key international bodies such as the ASEAN Taxonomy Board (ATB) and the Network for Greening the Financial System (NGFS).

As a member of the ATB, BNM contributed to the development of the ASEAN Taxonomy Version 4 (Taxonomy). In 2025, we led the work on developing the Technical Screening Criteria (TSC) for the manufacturing sector. Additionally, we were also involved in developing the TSC for the remaining sectors^[6] under the Plus Standard. The updated Taxonomy offers comprehensive guidance on identifying and classifying sustainable projects and economic activities in the region. The goal is to help investors and companies make informed investment decisions on environmentally sustainable investments.

At the side event of the Ethical Global Finance Summit 2025 in Edinburgh, United Kingdom, in collaboration with Sustainable Development Goals Hive-Ethical Finance Global, we showcased how integrating Islamic finance principles with sustainability can deliver tangible development outcomes. By sharing our approach with the global audience, we positioned Islamic finance as a practical solution supporting long-term global sustainability priorities. The strong interest from international audiences and investors signals growing momentum to collaborate with Malaysian stakeholders. This paves the way for new partnerships, deeper knowledge exchange and greater investment opportunities that drive responsible growth and real-world impact.

Expanding Trade and Investment Potential

As the lead negotiator for financial services, BNM continued to work to improve market access and negotiating strategic provisions to position Malaysia’s financial sector as a competitive global player – driving investment, fostering innovation, and fuelling sustainable economic growth.

In 2025, we played a role in the conclusion of two major trade agreements. First, the Malaysia−European Free Trade Association (EFTA) Economic Partnership Agreement (MEEPA) – Malaysia’s first trade pact with several European countries.^[7] Our involvement secured new markets for Malaysian financial institutions to provide services in EFTA countries, including for cross-border insurance. The second agreement is the Malaysia−Korea Free Trade Agreement (MKFTA). It strengthens collaboration with Korea as a key economic partner in the region. It also creates potential for Malaysian businesses to explore future economic opportunities in strategic areas such as digital economy and green economy.

These achievements set the stage for deeper integration and future opportunities. They also ensure our financial sector remains agile and competitive, making Malaysia an attractive trade and investment destination.

Going Forward

As global dynamics continue to shift, our international engagements remain anchored in a clear purpose. In 2025, we continued to safeguard stability while unlocking new opportunities for the nation and the region. Nevertheless, each partnership is part of a larger story. It is one of resilience, collaboration and shared progress. Moving forward, BNM will continue to be proactive and work closely with our partners. This would further enable us to ensure the financial system remains robust, responsive and future-ready.

Notes

^[1] The Finance Track advances regional financial integration across areas, including payments, local currency use, capital markets, sustainability, taxation and treasury functions.

^[2] Further details on these initiatives can be found in the chapter ‘Promoting Safe and Efficient Payment and Remittance Services’ and the feature article ‘Malaysia’s 2025 ASEAN/ASEAN+3 Chairmanship: Advancing Inclusive and Sustainable Economic Growth for ASEAN and Malaysia’ in BNM’s Annual Report 2025.

^[3] Further details on BNM’s efforts in 2025 can be found in the chapter ‘Maintaining Financial Integrity’ in BNM’s Annual Report 2025.

^[4] The Mutual Evaluation (ME) is a peer review assessment which analyses a country’s level of compliance with international standards and the level of effectiveness of its AML/CFT/CPF system. Further details on the ME of Malaysia can be found here: (https://www.fatf-gafi.org/en/publications/Mutualevaluations/mer-malaysia-2025.html).

^[5] Further details on BNM’s efforts can be found in the chapter ‘Towards a Greener Financial System’ in BNM’s Annual Report 2025.

^[6] The remaining sectors are (i) Agriculture, Forestry and Fishing; and (ii) Water Supply, Sewerage, Waste Management and Remediation Activities. The updated Taxonomy also includes inclusion of enabling sectors (i) Information & Communication; and (ii) Professional, Scientific & Technical Activities.

^[7] Members of EFTA are Iceland, Liechtenstein, Norway and Switzerland.