Heaptalk, Jakarta — Bank Indonesia (BI) and the Central Bank of the United Arab Emirates (UAE Central Bank) partnered to encourage the use of local currency in bilateral transactions. The UAE and Indonesia have established trade partnerships in multiple sectors. One of the successes of this partnership is the sustained growth of non-oil and gas trade from 2017 to 2023.
Representatives of both parties, Governor of Bank Indonesia Perry Warjiyo and Governor of the UAE Central Bank Khaled Mohamed Balama signed an MoU supporting advanced trade relations between the two countries. The MoU outlines a framework consisting of various elements to facilitate the settlement of cross-border trade transactions in two national currencies, namely the UAE Dirham and the Indonesian Rupiah. This cooperation agreement also explains the types of transactions that qualify and are possible to support financial market development.
Bolstering economic stability
Moreover, this collaboration signifies a crucial step in strengthening bilateral financial cooperation and is expected to help businesses reduce transaction processing costs. As part of this accord, the UAE Central Bank and Bank Indonesia will join forces to promote the use of their national currencies by endorsing the gradual implementation of the framework, which also strives to bolster economic and financial system stability.
In response to this partnership, Perry Warjiyo expressed the significance of efforts to deepen financial markets and strengthen economic relations between the United Arab Emirates and Indonesia through local currency. This initiative can encourage stability and resilience to overcome broadening economic vulnerability.
Meanwhile, Khaled Mohamed Balama said, “This agreement is the basis for strengthening future partnerships between the two parties, opening up greater business opportunities in the banking and finance sector, as well as an effort to support the growth of trade and investment.”
