RBI signs MoU with Bank of Indonesia to boost local currency in bilateral transactions

RBI MoU with BI: The Reserve Bank of India (RBI) and the Bank Indonesia (BI) have signed a Memorandum of Understanding (MoU) aimed at fostering the use of local currencies, specifically the Indian Rupee (INR) and the Indonesian Rupiah (IDR), for cross-border transactions. 

The MoU, signed by the Governor of the Reserve Bank of India, Shaktikanta Das, and the Governor of Bank Indonesia, Perry Warjiyo, establishes a framework to promote bilateral transactions in Rupees and IDR.

This collaboration seeks to facilitate current account transactions, permissible capital account transactions, and other economic and financial transactions as mutually agreed upon by both countries. 

The framework enables exporters and importers to invoice and pay in their respective domestic currencies, thereby boosting the development of an INR-IDR foreign exchange market. Such use of local currencies is expected to streamline costs and settlement times for transactions.

This agreement marks a major milestone in improving bilateral cooperation between RBI and BI. The adoption of local currencies in bilateral transactions is expected to improve trade between India and Indonesia, while also enhancing financial integration and reinforcing the longstanding historical, cultural, and economic ties between the two nations.