The central bank of Indonesia and the Ministry of Finance Japan have listed a number of banks as cross currency dealers, media reports said. This is an attempt to encourage rupiah and yen transactions for bilateral trade and investment.
It is reported that Mizuho Bank, MUFG Bank and Bank Negara Indonesia are appointed as dealers to handle rupiah and yen quotations in both countries. Both countries seek to encourage broader use of local currencies for bilateral trade and investment. For that reason, they signed a Memorandum of Understanding on the Local Currency Settlement framework in Tokyo, media reports said.
The terms of the agreement has allowed both countries to have interbank trading of the yen and rupiah. A statement said “The MoU will lead the Indonesian and Japanese authorities to deeper cooperation in information sharing and regular discussions.”
It is reported that the framework is beneficial for Japan and Indonesia as it allows them to deepen their relations in the financial section. In addition, it is anticipated to boost bilateral trade. Banks such as BRI, Bank Mandiri, BCA, BNI, Bangkok Bank PCL, Bank of Ayudhya PCL, Kasikornbank PCL, and Krung Thai have supported operationalisation of the rupiah-bath framework, media reports said.