BI And Central Bank Of Australia Agree To Renew Local Currency Bilateral Swap Agreement

JAKARTA - Bank Indonesia (BI) and the Australian central bank (Reserve Bank of Australia) are said to have reached a work agreement related to the renewal of the bilateral currency swap arrangement (BCSA) which was effective on 18 February 2022.

In BI's official broadcast today, it is known that the cooperation agreement was first agreed in December 2015 and has been extended for a period of three years since then.

“In accordance with the previous facility, the agreement allows for exchanges in the local currency of each country of up to 10 billion Australian dollars or equivalent to Rp. 100 trillion. The agreement will be effective for three years and can be extended upon the agreement of the two central banks," BI said in a release Monday, February 21.

Furthermore, the collaboration between the two neighboring countries is aimed at encouraging bilateral trade between Australia and Indonesia in the context of the economic development of the two countries, in particular to support the settlement of trade transactions in each country's local currency.

To note, apart from Australia, Bank Indonesia is also conducting financial cooperation with other central banks in several countries in the region, such as Malaysia, China and South Korea.

Meanwhile, the BCSA cooperation agreement between Bank Indonesia and the Reserve Bank of Australia was signed by BI Governor Perry Warjiyo and Governor Philip Lowe.

"The extension of the agreement also reflects the ongoing strengthening of cooperation between Bank Indonesia and the Reserve Bank of Australia," said BI.

For information, the Bilateral Currency Swap Agreement is a form of bilateral financial cooperation commonly carried out by the central bank.

This agreement allows a central bank to obtain foreign currency from partner central banks by exchanging the local currency of each country, to be exchanged again at the agreed maturity date.