India And Indonesia Agree To Use Rupees And Rupiah For Bilateral Transactions

Rupiah (Photo: Unsplash)

JAKARTA - Bank Indonesia (BI) together with the Central Bank of India (Reserve Bank of India/RBI) signed a memorandum of understanding to cooperate to encourage the use of local currencies of each country. This is in bilateral transactions between rupees and rupiah. "This cooperation framework allows exporters and importers to transact within local currencies, which in turn will encourage the development of the foreign exchange market between the two countries," said Head of the BI Communications Department Erwin Haryono quoting Antara.

He explained that the use of local currencies would reduce transaction costs and increase transaction completion time efficiency. The signing of the memorandum of understanding was carried out by the Governor of the Reserve Bank of India, Shaktikanta Das and BI Governor Perry Warjiyo.The agreement of a memorandum of understanding between BI and Reserve Bank of India is aimed at encouraging the use of local currencies of each country (rupee and rupee) in bilateral transactions that include current account, capital account transactions, as well as other economic and financial transactions as agreed by the two authorities.

Erwin said the collaboration marked an important achievement in strengthening bilateral financial cooperation between Bank Indonesia and the Reserve Bank of India. Through the use of local currencies, each country that is wider for bilateral transactions, it is hoped that it will contribute to promoting trade between Indonesia and India, deepening financial integration, and strengthening historical, cultural and economic relations that have existed so far between the two countries. This collaboration will expand the agreement of similar cooperation owned by Bank Indonesia with Malaysian authorities (Bank Negara Malaysia), Thailand (Bank of Thailand), Japan (Japan Ministry of Finance), China (People Bank of China), Singapore (Monetary Authority of Singapore), and South Korea (Bank of Korea).