BI And UAE Central Bank MoU Increase Trade Relations

Bank Indonesia (Photo: Antara)

JAKARTA - The Governor of Bank Indonesia, Perry Warjiyo, and the Governor of the Central Bank of the United Arab Emirates, Khaled Mohamed Balama, signed a Memorandum of Understanding (MoU).

The MoU supports the improvement of trade relations between the two countries through the establishment of a framework that encourages the use of local currencies for bilateral transactions.

One of the partnerships between the UAE and Indonesia is shown by the increasing growth of non-oil and gas trade between 2017 and 2023.

Responding to this agreement, Perry Warjiyo conveyed the importance of efforts to deepen the financial market and strengthen the United Arab Emirates' economic relations with Indonesia through the use of local currencies.

"This initiative is one of the efforts to encourage stability and resilience to overcome the increasing economic vulnerability," he quoted a written statement, Saturday, May 11.

The MoU describes a framework consisting of various elements to facilitate the completion of cross-border trade transactions in two national currencies (UAE and Rupiah Indonesia).

The MoU also describes types of transactions that meet the requirements and make it possible to support financial market development. This collaboration marks an important milestone in strengthening bilateral financial cooperation and is expected to help the business world reduce transaction processing costs.

Under this agreement, the Central Bank of the UAE and Bank Indonesia will collaborate in encouraging the use of their national currency by supporting the implementation of a gradual framework, which also aims to support economic stability and financial system stability.

Furthermore, Khaled Mohamed Balama, Governor of the Central Bank of the UAE, said this agreement was the basis for strengthening future partnerships between the two parties.

"Opening greater business opportunities in the banking and financial sectors, as well as an effort to support trade and investment growth," Khaled said.