VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

Bank Indonesia -BI and the Central Bank of Australia -RBA agreed to extend cooperation in the bilateral local currency swap arrangement (BCSA) worth 10 billion Australian dollars or Rp100 trillion. The exchange is an extension of the cooperation of the two central banks which will end next December. Governor of Bank Indonesia, Perry Warjiyo said in Jakarta on Thursday (9/8) that the financial cooperation between Indonesia and Australia through the use of currencies in each country would reduce dependence on the use of certain currencies. With this agreement, both countries can reduce the use of the US dollar in cross-territorial transactions. The use of US dollars from Indonesian foreign exchange which is usually used to pay for imports can be reduced by using the currencies of two countries. Thus, Indonesia's foreign exchange reserves can be saved to anticipate external economic pressures. Governor Perry Warjiyo also said that the cooperation agreement would be effective for three years. He added that the cooperation agreement was carried out amidst a series of implementation of the Executive Forum Meeting of the Asia Pacific and East Central Bank (EMEAP) in Manila, the Philippines on August 5, 2018. He also remarked that the extension of the cooperation is carried out by Bank Indonesia to encourage increased trade relations between the two countries. He emphasized that the cooperation is carried out to guarantee the settlement of trade transactions in local currency between the two countries. He also added that these efforts are part of financial market deepening initiatives in a bid to support the resilience of the national economy. Meanwhile, Director of the International Department of Bank Indonesia, Erwin Haryono said that so far, most of the trade investment transactions in Indonesian banks, amounting to 86.5 percent have been carried out in US dollars, even for export trade still using the US dollar to 96 percent and 76 percent import. As a result, every time, there is turmoil because the game against the US dollar greatly affects the price of the currency. Therefore, the swap facilities with bilateral local currency to this partner country can be mitigation if there is a crisis condition that will demand high US dollars. This can strengthen the resilience of the country's exchange rate against the US dollar in the event of financial difficulties due to the global crisis.