JAKARTA - Bank Indonesia (BI) is said to have reached an agreement with the Malaysian central bank regarding the renewal of the bilateral swap agreement in local currency (Local Currency Bilateral Swap Arrangement LCBSA).
BI Governor Perry Warjiyo said this collaboration was estimated to have an influence on the currency of each country worth Rp28 trillion or the equivalent of 8 billion ringgit.
The agreement was effective for three years and is an update to the agreement that was first agreed upon in 2019. The LCBSA renewal has also further strengthened financial cooperation between the two central banks," he said in an official statement on Tuesday, September 27.
According to Perry, BI believes that LCBSA is a real reflection of the continued strengthening of financial cooperation between the two countries.
"The agreement update also shows a joint commitment to strengthen financial market stability through the wider use of local currencies for bilateral transactions between Indonesia and Malaysia," he said.
On the same occasion, the Governor of the Central Bank of Malaysia, Tan Sri Nor Shamsiah Mohd Yunus, stated that his party was considering the significant development of trade flows between Malaysia and Indonesia and needed ongoing strengthening efforts.
We welcome you to continue your cooperation with Bank Indonesia through this renewal of the LCBSA agreement. LCBSA cooperation also complements the financial cooperation that has been owned by the two central banks aimed at encouraging the use of local currencies in trade activities and investment between the two countries," he said.
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