BI And Central Bank China Extend Bilateral Cooperation In Local Currency Exchange

JAKARTA - Bank Indonesia (BI) and the People's Bank of China (PBOC) have agreed to renew the bilateral agreement for local currency exchange or Bilateral Currency Swap Arrangement (BCSA) for the next 5 years.

The agreement was signed by the Governor of BI, Perry Warjiyo, and the Governor of PBOC, Pan Gongsheng, and will take effect from January 31, 2025.

Executive Director of the BI Communication Department Ramdan Denny Prakoso said that BCSA's cooperation allowed the exchange of local currencies between the two central banks to be worth CNY400 billion (US $ 55 billion equivalence) with an equivalent value of Rupiah.

Denny said that the two central banks are committed to further encouraging bilateral trade and direct investment in local currencies and synergizing to maintain financial market stability.

"The renewal of this agreement continues the cooperation established in 2009 and has been updated several times," he said in his statement, Friday, February 7.

Denny conveyed that the BCSA agreement complements the cooperation in resolving local currency-based transactions (Local Currency Transaction) which has been running since 2021 and is currently the main scheme in the completion of trade transactions and investment in the currency of each country.

According to him, this collaboration is also part of the BI policy mix in supporting Asta Cita, in particular maintaining the resilience of the external sector through efforts to fulfill the adequacy of foreign exchange reserves.

"Bank Indonesia views the renewal of the BCSA agreement with PBOC as representing the important role of international cooperation as part of a policy mix that supports major policies in the monetary, macroprudential, and payment systems and contributes to the development of local currency-based transactions between the two countries," he concluded.