RI, South Korea agree US$10b swap deal

JAKARTA. Indonesia and South Korea have agreed to a bilateral swap agreement worth Rp 115 trillion (US$10 billion).

Bank Indonesia (BI) spokesperson Difi A.Johansyah said in Jakarta on Sunday that the facility of currency cooperation between the South Korean won and Indonesian rupiah would be effective for three years and the swap deal could be extended based on agreement between the two parties.

“The Bilateral Currency Swap Arrangement (BCSA) is aimed at promoting bilateral trade and strengthening financial partnership that can bring benefit to the two countries,” said Difi as quoted by Antara news agency.

The partnership was signed by Finance Minister Chatib Basri and BI governor Agus Martowardojo and his South Korean counterpart, in Jakarta, on Saturday.

Difi said BI and Bank of Korea agreed that the cooperation would contribute positively to the stabilization of the regional financial market and strengthen bilateral, economic and financial partnership in dealing with global economic uncertainties.

Earlier, BI and the People’s Bank of China agreed to extend a $15 billion bilateral swap agreement, which was signed to strengthen the financial system in 2009, on Oct.1.

BI and Bank of Japan, as the agent of the Japanese finance minister, also agreed to extend a $12 billion bilateral swap agreement which took effect on Aug.31.

With bilateral swap deal with its three economic partners, the Indonesian government has a total of $37 billion worth commitment that could be used to safeguard the security of its foreign exchange reserves.

The government has also prepared a $5.5 billion worth standby loan from its multilateral partners as part of efforts to maintain its economic growth and macro economy stability comprehensively. (The Jakarta Post)