• Published on 30 September 2024
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Bank Negara Malaysia and Bank Indonesia strengthen bilateral cooperation

Bank Negara Malaysia (BNM) and Bank Indonesia (BI) held a high-level bilateral meeting in Jakarta on 27 September 2024.

The two central banks exchanged information and experiences and had a comprehensive policy discussion encompassing macroeconomic, monetary, and financial development, payment systems and digitalisation, and strategies for advancing Islamic finance.

The close engagements reflect the long-standing cooperation between the central banks and strong commitment to further strengthen mutually beneficial collaboration between both countries.

At the meeting, BNM governor Abdul Rasheed Ghaffour and BI governor Perry Warjiyo signed the renewal of the Local Currency Bilateral Swap Agreement (LCBSA). The LCBSA enables the exchange of local currencies between the two central banks, with a value amounting to MYR 24 billion ($5.8 billion) / IDR 82 trillion ($5.4 billion), over a period of five years. This follows the initial agreement which was signed in 2019 and the subsequent renewal in 2022. The LCBSA reflects the ongoing collaborative efforts in central banking cooperation to strengthen both countries’ resilience, while also supporting the use of local currencies in trade and investments.

Ghaffour said, "Given the deepening trade and financial linkages between Malaysia and Indonesia, we are pleased to continue our cooperation with Bank Indonesia with the renewal of the LCBSA. The LCBSA supplements the Local Currency Settlement Framework (LCSF) between our two countries, which remains a key enabler for trade and investment settlements in local currencies."

Warjiyo said, "Bank Indonesia believes that the enhancement of LCBSA with BNM represents the importance of international cooperation as part of Bank Indonesia's policy mix that supports key policies in the area of monetary, macroprudential, and payment system, while contributing to the development of local currency in bilateral transactions."

Re-disseminated by The Asian Banker