The central banks of Indonesia and China agreed to explore expanding the size of their bilateral currency swap arrangement, as well as reaffirmed their commitment to increasing the use of local currencies in bilateral transactions.
To that effect, a memorandum of understanding on local currency transactions involving Bank Indonesia, the People's Bank of China and the Hong Kong Monetary Authority was signed, according to a Thursday release by Bank Indonesia. The agreement aims to promote the use of local currencies in trade and investment, improve transaction efficiency, and support deeper regional financial integration.
The two central banks also launched the Indonesia-China cross-border QR payment system, while Bank Mandiri (IDX:BMRI) was designated as a direct participant in China's Cross-border Interbank Payment System to streamline clearing and settlement processes.
Bank Indonesia and the People's Bank of China also signed another MoU to establish a Renminbi clearing arrangement in Indonesia, which is expected to ensure sufficient liquidity for trade, investment and financial activities.