Bank Indonesia (BI) and the Reserve Bank of India signed a Memorandum of Understanding (MoU) on 7 March 2024 in Mumbai to promote the use of local currencies for cross-border bilateral transactions. The MoU covers all current account transactions, permissible capital account transactions, and any other economic and financial transactions as agreed upon by both countries. This framework would enable exporters and importers to invoice and pay in their respective domestic currencies. In an effort to reduce the country’s dependency on US Dollar and enhance macroeconomic stability, BI has been promoting local currency transaction (LCT) agreements with Indonesia’s major trading partners. The agreement with India is the latest development in this initiative, following similar deals with Malaysia, Thailand, Japan, China, Singapore, and South Korea. Bank Indonesia reported a significant increase in LCT scheme usage, with the value jumping by 53% in 2023 to €5.9 billion. However, this figure remains small compared to Indonesia's overall trade volume with its six LCT partner countries. For example, Indonesia's trade with China alone reached €118 billion last year. A key factor hindering wider LCT adoption is Indonesia’s heavy reliance on imported raw materials and capital goods. According to Indonesian statistics, raw materials comprise a staggering 73% of the country's total imports, with capital goods contributing an additional 18%. This dependence on foreign supplies incentivises many industrial players to prioritise holding US Dollars, as it simplifies purchasing materials from various countries.Link di fonte: https://jakartaglobe.id/business/bank-indonesia-continues-dedollarization-efforts-with-rbi-partnership (ICE GIACARTA)

Fonte notizia: Jakarta Globe, 7 March 2024