JAKARTA (TheInsiderStories) — To maintain monetary and financial stability, Bank of Indonesia (BI) and Monetary Authority of Singapore (MAS) established financial agreement valued US$10 billion, for foreign exchange liquidity access. The agreement signed by Bi’s governor Perry Warjiyo and MAS’s acting-director Ravi Menon, on Monday (05/11).
The one year-agreement consists of two parts. Swap bilateral agreement in local currency, up to SG$9.5 billion or Rp100 trillion. With this agreement, each can obtain foreign currency from another central bank in exchange for domestic currency.
While the other one is bilateral repurchase agreement in foreign exchange, an update of a previous agreement. This is an additional $2 billion repurchase value, to $3 billion. Both Indonesia and Singapore can get foreign exchange liquidity in US Dollars with collateral in government securities.
“It reflects strengthened bilateral monetary and financial cooperation between Singapore and Indonesia, and indicates the commitment of the authorities of Indonesia and Singapore to maintain financial stability amid the lingering uncertainty in the global financial market,” said Warjiyo in a written statement.
The agreement is a follow-up of Indonesia President Joko Widodo and Singapore Prime Minister Lee Hsien Loong, Oct. 11th, in Bali. They asked each central bank to formulate bilateral financial agreement aims to stabilize regional economy amid global financial turmoil.
“We welcome the swap and repo collaboration between BI and MAS for a total of US $ 10 billion,” President Widodo said.
While Premier Lee added, the collaboration between BI and MAS was carried out to respond to external conditions in global financial markets that affect all markets in the world including Southeast Asian countries (ASEAN) and Indonesia.
Menon said, financial market players reacted too much on the global economic uncertainty. So he expected that the agreement can also increase investors’ trust.
Meanwhile, Indonesia is trying to bounce back Rupiah exchange rate amid global market strife. On November 5th, mid rate of Rupiah against US Dollar slightly gained strength to 14,972.
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