𝐂𝐲𝐜𝐥𝐨𝐧𝐞 𝐁𝐢𝐩𝐚𝐫𝐣𝐨𝐲'𝐬 𝐃𝐞𝐯𝐚𝐬𝐭𝐚𝐭𝐢𝐧𝐠 𝐈𝐦𝐩𝐚𝐜𝐭: 𝟖𝟎𝟎 𝐔𝐩𝐫𝐨𝐨𝐭𝐞𝐝 𝐓𝐫𝐞𝐞𝐬, 𝟓𝟎𝟎 𝐇𝐨𝐮𝐬𝐞𝐬 𝐃𝐚𝐦𝐚𝐠𝐞𝐝, 𝐚𝐧𝐝 𝟐𝟑 𝐈𝐧𝐣𝐮𝐫𝐞𝐝

On Thursday, the Reserve Bank of India (RBI) and the Bank of Indonesia inked a Memorandum of Understanding (MoU) to establish a framework promoting the utilization of local currencies, namely the Indian Rupee (INR) and the Indonesian Rupiah (IDR), for cross-border transactions. The signing ceremony was attended by Shaktikanta Das, the Governor of RBI, and Perry Warjiyo, the Governor of Bank of Indonesia.

"The MoU establishes a framework for cooperation in facilitating cross-border transactions using local currencies between India and Indonesia, with the aim of encouraging bilateral usage of INR and IDR," stated the RBI.

Encompassing all current account transactions, permissible capital account transactions, and other economic and financial transactions as mutually agreed, this framework facilitates invoicing and payment in domestic currencies, thus fostering the development of an INR-IDR foreign exchange market. Furthermore, employing local currencies streamlines transaction costs and settlement times.

"This collaboration signifies a significant milestone in enhancing bilateral cooperation between RBI and BI. The adoption of local currencies in bilateral transactions is expected to enhance trade between India and Indonesia, fostering deeper financial integration and reinforcing the longstanding historical, cultural, and economic ties between the two nations," added RBI.

This marks the second such MoU with any country after the United Arab Emirates (UAE). Previously, on July 15 last year, RBI had signed two MoUs with the Central Bank of the UAE to establish a framework promoting the use of local currencies for cross-border transactions and enhancing cooperation between their payment and messaging systems.