JAKARTA (TheInsiderStories) — Bank Indonesia and People’s Bank of China (PoBC) renew its cooperation over bilateral local currency swap arrangement and doubling the amount from CNY100 billion (US$15 billion) to CNY200 billion, according to the central bank official released on Monday (11/19). The agreement was inked by BI Governor Perry Warjiyo and PoBC Governor Yi Gand on Friday (11/16).
The purpose for promoting bilateral trade and direct investment of the two countries, also supporting financial market stability. The agreement valid for three years and can be further extended.
“It reflects the strengthened bilateral monetary and financial cooperation between BI and PoBC, and indicates the commitment of both central banks to maintain financial stability amid the lingering uncertainty in the global financial market”, said Warjiyo in a written statement.
He assured the strong financial cooperation between Indonesia and China. He also highlighted that bilateral currency swap arrangement with other central banks can increase market’s trust on Indonesia economy fundamental.
Beside with China, Indonesia has bilateral currency swap arrangements with Japan valued $22,76 billion, Australia with AUS$10 billion, and some ASEAN countries.
Indonesia President Joko Widodo previously asked ASEAN country leaders to minimize dependency only on one currency, by implementing currency swap and using domestic currency in cross-country trade transaction payment, to tackle global uncertainty and protectionism.
As it is also stated in the multilateral currency swap agreement, Chiang Mai Initiative. The currency swap agreement aims to stabilize local currency over US Dollar strengthening.
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