Bank Indonesia And Monetary Authority Of Singapore Extend Bilateral Financial Cooperation

Bank Indonesia (BI) building. (doc bi.go.id)

JAKARTA - Bank Indonesia (BI) and the Central Bank of Singapore or Monetary Authority of Singapore (MAS) have agreed to extend the bilateral financial cooperation agreement which is valid until November 2, 2024.

Director of the BI Communication Department Nita A. Muelgini said this collaboration had been going on since November 2018 as a follow-up to the agreement between the President of the Republic of Indonesia Joko Widodo and Singaporean Prime Minister Lee Hsien Loong.

"Sepat to continue to strengthen cooperation in order to maintain monetary and financial stability in the region, including in the two countries," Nita said in a statement Friday, November 3.

This cooperation has been extended every year, lastly in November 2022. This fifth extension agreement further shows BI and MAS's commitment to continue to support each other in order to build trust in economic conditions in each country.

Nita explained that the extended cooperation consisted of two agreements, namely the Local Currency Bilateral Swap Agreement (LCBSA) and Bilateral Repo Line (BRL).

First, the local currency agreement bilateral swap agreement (LCBSA) which allows local currency exchanges between the two central banks up to 9.5 billion Singapore dollars or Rp. 100 trillion.

The second agreement, the Bilateral Repo Line (BRL), allows repo transactions between BI and MAS to obtain liquidity in the US dollar (US) worth US $ 3 billion.

By guaranteeing government bonds issued by G3 (US, Japan, and Germany) countries, which BI and MAS own.

For information, LCBSA is a form of bilateral financial cooperation carried out by the central bank that allows a central bank to obtain foreign exchanges from partner central banks by exchanging local currencies for each country, and then exchanging back at the agreed maturity.

Meanwhile, BRL is a form of biateral financial cooperation carried out by the central bank which allows a central bank to obtain liquidity in the US dollar from the partner's central bank by guaranteeing its securities, and then reexchange them at the time of their agreed maturity.