JAKARTA - Bank Indonesia (BI) and the People's Bank of China (PBOC) agreed to strengthen the use of local currencies in bilateral transactions.
This agreement was marked by the signing of a Memorandum of Understanding (MoU) to encourage the use of local currencies in bilateral transactions.
The signing was carried out by BI Governor Perry Warjiyo and the Governor of People's Bank of China Pan Gongsheng and was also witnessed by President Prabowo Subianto and Chinese Prime Minister Li Qiang.
The Executive Director of the BI Communication Department, Ramdan Denny Prakoso, explained that the cooperation was in the use of local currencies and was a further step from the previous one to strengthen bilateral transactions between the two countries.
"We want to expand the use of each currency in two-state transactions, so we continue to expand the use of local currencies for economic transactions between the two countries," Ramdan told the media crew, Monday, May 26.
He added that further technical elaboration regarding this cooperation will be explained in the next seven stages of implementation.
Previously, Denny revealed that this Memorandum of Understanding strengthened the previous Memorandum of Understanding which was signed by the two central banks on September 30, 2020 by expanding the scope of cooperation in the settlement of bilateral local currencies including current transactions, capital transactions, and financial transactions.
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"This Memorandum of Understanding also complements cooperation efforts in increasing payment connectivity for the wider use of local currencies in bilateral transactions," Ramdan said in his official statement Sunday, May 25.
Denny explained that the details of the transactions that were allowed would be stated in the implementation instructions.
"This Memorandum of Understanding will then promote the use of local currencies in transactions and bilateral investments and increase monetary cooperation between the two countries in the monetary and financial markets," he said.
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