China, Indonesia Settle Bilateral Transactions in National Currencies
The central banks of China and Indonesia have officially launched a framework for settling bilateral transactions in their respective national currencies, local media reported on Friday.
Initiated on Thursday, this new framework is founded on a memorandum of understanding signed in May of this year. It enhances the previous cooperation framework by broadening the scope of local currency settlements to include all items in the balance of payments.
The governors of both central banks also announced the initiation of a bilateral trial for a cross-border QR code interconnection project between China and Indonesia, which will facilitate transactions in national currencies. This project is expected to be fully operational by 2025.
“The establishment of the local currency settlement framework for bilateral transactions and the interconnection of cross-border payments via QR codes are two significant achievements in financial cooperation between China and Indonesia,” stated Pan Gongsheng, governor of the People’s Bank of China (PBOC).
He further emphasized that the two central banks should continue to deepen their collaboration in areas such as payment system connectivity, the use of local currencies, and digital currencies. Additionally, the banks will establish a joint working mechanism to further institutionalize bilateral cooperation and promote deeper, more robust financial collaboration, according to the PBOC.
