A teller holds a 100,000 rupiah bank note at a money changer in Jakarta (Photo: jakartaglobe.id) Jakarta (VNA) – Bank Indonesia (BI) and the People’s Bank of China (PBOC) on September 30 signed a memorandum of understanding (MoU) to establish a framework promoting the use of local currencies for trade and direct investment.
BI has signed similar agreements with other central banks in Asia, particularly with the Bank of Thailand and Bank Negara Malaysia, as well as with the Japanese Finance Ministry, in an effort to mitigate risks of being over dependent on the US dollar.
With the local currency settlement (LCS) agreement signed by BI Governor Perry Warjiyo and PBOC Governor Yi Gang, both central banks agreed to promote the direct exchange rate quotation and interbank trade for the Chinese yuan and the Indonesian rupiah. The two central banks will strengthen the cooperation through regular information sharing and discussion.
BI Governor Perry Warjiyo said the authorities believe that the deal will positively contribute to encouraging the use of local currencies for settlement of trade and direct investment between the two countries.
China is Indonesia's largest trading partner, with more than 73 billion USD worth of goods exchanged between the two countries annually. Chinese investors have also growing to become important sources of investment in Indonesia./.
