Now, Indonesia and China Use Yuan and Rupiah for Transactions | 1NEWS

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This is the reason.

Dream – Now Bank Indonesia (BI) and the People’s Bank of China (PBC) have officially started the implementation of cooperation in the settlement of bilateral transactions with local currencies. The framework for this cooperation includes the use of direct exchange rate quotes (direct quotation) and relaxation of certain regulations in foreign exchange transactions between the rupiah and the yuan.

Quoted from the page BI, Monday 6 September 2021, this cooperation framework was prepared based on a Memorandum of Understanding that was agreed and signed by the Governor of BI, Perry Warjiyo, and the Governor of PBC, Yi Gang, on September 30, 2020. Apart from China, currently, BI also has SCS cooperation framework with several other partner countries, namely Japan, Malaysia, and Thailand.

The implementation of this cooperation is part of BI’s ongoing efforts to encourage wider use of local currency in the settlement of trade transactions. This cooperation is also considered to be able to encourage direct investment with various partner countries.

The expansion of the use of LCS is expected to support rupiah stability through its impact on reducing dependence on certain currencies in the domestic foreign exchange market.

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Give Benefits to Entrepreneurs

BI said this cooperation could provide direct benefits to entrepreneurs. Here are the details.

1. More efficient transaction conversion fees in foreign currencies.

2. Availability of alternative trade finance and direct investment in local currency.

3. Availability of alternative hedging instruments in local currency.

4. Diversification of currency exposure used in the settlement of foreign transactions.

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Show These Banks

BI and PBC have appointed several banks in their respective countries to act as appointed cross currency dealers (ACCD). It aims to support the operation of LCS with rupiah and yuan.

The banks designated as ACCD are banks that are deemed to have the capability to facilitate rupiah and yuan transactions in accordance with the agreed LCS cooperation framework.

These capabilities are having a good level of resilience and health, experience in facilitating trade/investment transactions and having the capacity to provide various financial services, as well as having good cooperative relationships with banks in partner countries.

The following is a breakdown of the banks that are designated as ACCD in Indonesia.

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1. Indonesia

-PT Bank Central Asia Tbk

-Bank of China (Hongkong) Ltd.

-PT Bank China Construction Bank Indonesia Ltd

-PT Bank Danamon Indonesia Tbk

-PT Bank ICBC Indonesia

-PT Bank Mandiri (Persero), Tbk

-PT Bank Maybank Indonesia, Tbk

-PT Bank Negara Indonesia (Persero), Tbk

-PT Bank OCBC NISP, Tbk

-PT Bank Permata, Tbk

-PT Bank Rakyat Indonesia (Persero), Tbk

-PT Bank UOB Indonesia

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2. China

-Agriculture Bank of China

-Bank of China

-Bank of Ningbo

-Bank Mandiri Shanghai Branch

-China Construction Bank

-Industrial and Commercial Bank of China

-Maybank Shanghai Branch

-United Overseas Bank (China) Limited

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