JAKARTA (TheInsiderStories) - Indonesia and People’s Republic of China (PRC) have started using Rupiah and Remimbi ((RMB) for direct transactions between the two countries to boost bilateral economic cooperation, a government senior official said. The move was agreed following the cooperation agreement between the two countries’ state owned banks on Wednesday in Beijing, China.
“Trade and economic cooperation between the two countries would expand. Therefore, it is better for us to have direct transactions in rupiah and Yuan,” Minister for State Enterprises Rini Sumarmo told Antara news agency.
Rini Soemaro was in Beijing to attend the signing of a loan agreement between three state lenders PT Bank Mandiri Tbk (IDX: BMRI), PT Bank Negara Indonesia Tbk (IDX: BBNI) and PT Bank Rakyat Indonesia Tbk (IDX: BRI) with the China Development Bank (CDB) with total amount $3 billion (Rp43.20 trillion).
In the same day, PT Bank Tabungan Negara Tbk (IDX: BBTN) signed the loan agreement with PT ICBC Indonesia, unit of China’s ICBC worth RMB5 billion or equal to Rp 10 trillion to support one million houses program and infrastructure projects.
The minister added that using rupiah and yuan for direct transactions would protect both currencies from the negative impact of any change on U.S dollar demand.
The loan was the first part of a total loan of $20 billion agreed between the Ministry of State Enterprises, CDB and NDRC, Rini said, adding there is also a loan of $10 billion for PT Perusahaan Listrik Negara, the state power producer company.
Chief Executive (CEO) of Bank Mandiri Budi Gunadi Sadikin, said the bank has proposed the use of RMB in banking transaction by its branch in Shanghai.
“Hopefully by the end of this year we could start using RMB, and no longer use dollar especially in banking deals in China,” he stated.
CEO of Bank Negara Indonesia Achmad Baiquni added his bank has already used RMB in banking transactions in a number of facilities for debtors. (*)
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