Indonesia and India Cooperate on the Use of Local Currencies

CURRENCY – JAKARTA. Bank Indonesia (BI) and the Reserve Bank of India (RBI) have signed a memorandum of understanding on the use of each country's local currency, the rupiah and the rupee, in bilateral transactions. The signing of this share work was carried out in Mumbai, Thursday (7/3).

The Head of BI's Communication Department, Erwin Haryono, said that the use of the rupiah and the rupee in bilateral transactions includes current account transactions, permitted capital account transactions, as well as other economic and financial transactions as agreed by both authorities.

“This cooperation framework allows exporters and importers to transact in local currency, which in turn will encourage the development of the foreign exchange market in both countries,” said Erwin in an official BI statement, Thursday (7/3).

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Erwin explained that the use of local currency will reduce transaction costs and increase transaction settlement efficiency. According to him, this collaboration marks an important achievement in strengthening bilateral financial cooperation between BI and RBI.

“The wider use of each country's local currency for bilateral transactions is expected to contribute to promoting trade between Indonesia and India, deepening financial integration, and strengthening the historical, cultural, and economic ties that have been established between the two countries,” he added.