Bank Indonesia (BI) and the People’s Bank of China (PBOC) have signed an enhanced Memorandum of Understanding (MoU) to promote the use of local currencies in bilateral transactions (25/5).

The signing took place in the presence of President Prabowo Subianto and Chinese Premier Li Qiang, with BI Governor Perry Warjiyo and PBOC Governor Pan Gongsheng representing their respective central banks.

This renewed MoU builds on a previous agreement signed on 30 September 2020. The updated memorandum broadens the scope of bilateral local currency settlement cooperation.

It now includes current account transactions, capital transactions, and financial transactions, aiming to facilitate more diverse and flexible use of local currencies in cross-border exchanges.

The agreement also supports ongoing efforts to strengthen payment connectivity between the two countries.

This connectivity is expected to enable wider adoption of local currencies in bilateral trade and financial transactions.

Specific details on eligible transaction types will be outlined in forthcoming implementation guidelines.

According to the joint statement, the MoU will promote the use of local currencies in bilateral transactions and investments, while also enhancing monetary cooperation between the two countries in money and financial markets.

PHOTO: BANK INDONESIA

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