Indonesia and Japan have listed a number of banks as cross currency dealers in an attempt to encourage Rupiah and Yen transactions for bilateral trade and direct investment.
The countries signed a Memorandum of Understanding (MoU) on the Local Currency Settlement framework in Tokyo.
“Bank Indonesia (BI) and the Ministry of Finance of Japan (JMOF) announced the launching of the framework for cooperation to promote the use of local currencies for settlement of bilateral trade and direct investment between Japan and Indonesia. This is in accordance with the Memorandum of Cooperation between Bank Indonesia and the Ministry of Finance of Japan that was signed on December 5th, 2019,” Bank Indonesia said in a statement.
Under the joint efforts, rules were relaxed in a bid to encourage the use the two currencies, Yen and Rupiah, for transactions.
The Indonesian banks with the task of carrying out cross currency dealers in Indonesia include MUFG Bank, Bank BTPN, Bank Central Asia, Bank Mandiri, Bank Mizuho Indonesia, Bank Negara Indonesia and Bank Rakyat Indonesia.
The Japanese banks with the task include Mizuho Bank, MUFG Bank, Bank Negara Indonesia and Sumitomo Mitsui Banking Corporation.
The move is expected to trim the countries’ dependency on the U.S. dollar which has been fluctuating during the novel coronavirus pandemic.
The trade volume of the countries reached nearly $32 billion in 2019. Japan is one of the top investors in Indonesia.
