Indonesia and South Korea Agree to Abandon the US Dollar. Bank Indonesia (BI) and the Bank of Korea have agreed to extend their bilateral currency swap arrangement (BCSA) in their respective local currencies. In its official statement, BI explained that the extension of the BCSA agreement with the Bank of Korea was made on Monday (3/6/2023).
“The agreement was signed by the Governor of Bank Indonesia, Perry Warjiyo, and the Governor of the Bank of Korea, RHEE, Chang Yong,” BI said.
The agreement’s extension will be effective for three years, starting from March 6, 2023, until March 5, 2026, and can be extended again by both central banks’ agreement.
BI claimed that this agreement reflects the strong economic relationship between the two countries, including financial cooperation between the two central banks.
With the BSCA agreement with South Korea, both Indonesia and Korea can conduct trade and investment transactions using their respective local currencies up to KRW 10.7 trillion or IDR 115 trillion.
BI explained that the agreement aims to promote bilateral trade and strengthen financial cooperation that benefits the development of Indonesia and South Korea’s economies.
“Specifically, cooperation will also support the settlement of trade transactions using local currencies between the two countries even in crisis conditions to support regional financial stability,” Bank Indonesia said.
The BCSA cooperation agreement between Bank Indonesia and the Bank of Korea was first signed in March 2014 and has been extended several times. The extension of the agreement will be effective for three years, starting from March 6, 2023, until March 5, 2026, and can be extended again by both central banks’ agreement.
BI claimed that this agreement reflects the strong economic relationship between the two countries, including financial cooperation between the two central banks.