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India, Indonesia sign pact to trade in local currencies

The Reserve Bank of India (RBI) and Bank Indonesia (BI) on March 7 signed and exchanged a Memorandum of Understanding (MoU) to establish a framework to promote the use of local currencies Indian rupee (INR) and Indonesian rupiah (IDR)). The MoU was signed in the presence of RBI governor Shaktikanta Das and Bank Indonesia Governor Perry Warjiyo.
India, Indonesia sign pact to trade in local currencies ảnh 1 RBI governor Shaktikanta Das (Photo: https://newsonair.gov.in

New Delhi (VNA) – TheReserve Bank of India (RBI) and Bank Indonesia (BI) on March 7 signed and exchanged a Memorandum ofUnderstanding (MoU) to establish a framework to promote the use of localcurrencies Indian rupee (INR) and Indonesian rupiah (IDR)). The MoU was signedin the presence of RBI governor Shaktikanta Das and Bank Indonesia GovernorPerry Warjiyo.


The MoU covers all currentaccount transactions, permissible capital account transactions and any othereconomic and financial transactions agreed upon by both countries.

The RBI stated that this framework would enable exporters and importers to invoiceand pay in their respective domestic currencies, which in turn would enable thedevelopment of INR-IDR foreign exchange market. The use of local currencies wouldoptimise costs and settlement time for transactions.

This collaboration marks a key milestone in strengtheningbilateral cooperation between the RBI and BI as use of local currencies inbilateral transactions will eventually contribute to promoting trade betweenthe two nations.

Indonesia is the second largesttrading partner of India in the ASEAN region. Bilateral trade increased from 6.9billion USD in 2007 to 38.84 billion USD in 2023. Indonesia occupies the 33rd position in FDIequity inflows into India with a cumulative FDI of 648.39 million USD in the period from April 2000 to March 2023./.

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