Bank Negara Malaysia and Bank Indonesia renewed their Local Currency Bilateral Swap Agreement, extending the RM24 billion/IDR 82 trillion exchange arrangement for five years to strengthen economic ties and promote local currency use in trade. The renewal highlights the ongoing cooperation between the two central banks.
27 September 2024 – Today, Bank Negara Malaysia (BNM) and Bank Indonesia (BI) held a high-level bilateral meeting in Jakarta, reaffirming their commitment to enhancing cooperation between the two central banks. The meeting focused on exchanging insights and engaging in comprehensive discussions on key issues including macroeconomic policy, monetary and financial developments, payment systems, digitalisation, and strategies to promote Islamic finance. This engagement underscores the deep-rooted collaboration between the two nations and their shared goals of fostering economic resilience.
A significant outcome of the meeting was the renewal of the Local Currency Bilateral Swap Agreement (LCBSA), signed by BNM Governor Dato’ Seri Abdul Rasheed Ghaffour and BI Governor Perry Warjiyo. The agreement, valued at RM24 billion/IDR 82 trillion, enables the exchange of local currencies between the two central banks for another five years. This renewal builds on the original 2019 agreement and its subsequent renewal in 2022, emphasizing both countries’ commitment to bolstering economic stability and promoting the use of local currencies in trade and investments.
Governor Abdul Rasheed highlighted the growing economic ties between Malaysia and Indonesia, noting that the LCBSA complements the Local Currency Settlement Framework (LCSF), a key mechanism facilitating trade and investment settlements in local currencies. BI Governor Perry Warjiyo echoed this sentiment, emphasizing that the LCBSA enhances Bank Indonesia’s policy mix in supporting monetary, macroprudential, and payment system policies, while promoting the development of local currency use in bilateral transactions.
