RBI and Bank Indonesia sign a MoU to boost INR and IDR use in cross-border trade.
In a significant move towards enhancing economic cooperation and promoting the use of local currencies in cross-border transactions, the Reserve Bank of India (RBI) and Bank Indonesia (BI) have signed a Memorandum of Understanding (MoU). This landmark agreement, signed in Mumbai by RBI Governor Shaktikanta Das and BI Governor Perry Warjiyo, establishes a framework aimed at facilitating transactions in Indian Rupees (INR) and Indonesian Rupiah (IDR) for bilateral trade and investment activities.
This MoU not only marks a key milestone in the strengthening of bilateral ties between India and Indonesia but also paves the way for deeper financial integration between the two countries. By promoting the use of INR and IDR in cross-border transactions, the initiative is expected to enhance economic exchanges by reducing reliance on third-party currencies, thus optimising transaction costs and settlement times for businesses on both sides.
The comprehensive scope of the MoU encompasses all current and permissible capital account transactions, along with other financial and economic exchanges mutually agreed upon by both nations. A significant outcome of this agreement is the facilitation of invoicing and payments in the respective local currencies for exporters and importers, which is anticipated to foster the development of an INR-IDR foreign exchange market.
This strategic collaboration between the RBI and BI is seen as a step forward in promoting trade and deepening the historical, cultural, and economic relations between India and Indonesia. The initiative is aligned with broader efforts to enhance local currency use in the region, contributing to the stability and efficiency of financial transactions between the two countries.
(Source: AIR News)
