RBI and BI Sign MoU to Encourage Use of Rupee-Rupiah Currency for Bilateral Transactions

India (Atnews) - In order to achieve the goal of closer economic integration with Indonesia, the Reserve Bank of India (RBI) and Bank Indonesia (BI) today signed a Memorandum of Understanding (MoU) to establish a framework to encourage the use of local currencies for cross-border transactions.

The MoU was signed by RBI Governor, Shaktikanta Das, and his counterpart, President if BI, Perry Warjiyo, during the visit of a high-level BI delegate to Mumbai, Thursday (Mar 7). This is the second MoU signed by India with a foreign country after the UAE.

This MoU will encourage the use of Rupees and Rupiah currencies in all current account transactions, permitted capital account transactions, and other economic and financial transactions, as agreed by both countries.

Considering that India-Indonesia is an important trading partner with bilateral trade value reaching USD 40 billion in 2022 and increasing investment in several sectors, this framework will contribute to the expansion of business relations between India and Indonesia by enabling exporters and importers to collect and pay in in their respective countries. Rupee-Rupiah currency, thereby reducing transaction settlement time and costs as well as foreign currency exchange rate volatility.

Through closer cooperation between the two central banks, the MoU also lays the foundation for deeper financial market integration, as well as payment system linkages in the near future, which will benefit professionals working in respective country, and around half a million Indian tourists who visit Indonesia every year. The Embassy will support relevant stakeholders on both sides in accelerating the implementation of the MoU and wider use of the Local Currency Settlement System by the business world. (GAB/001)