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This renewed agreement allows for the exchange of local currencies between the banks, amounting to RM24bn/IDR 82tn, and will remain in effect for five years.
Bank Negara Malaysia (BNM) and Bank Indonesia (BI) held a bilateral meeting in Jakarta on 27 September 2024, which served as a platform for the two central banks to share insights and experiences while engaging in an extensive policy discussion that encompassed macroeconomic trends, monetary and financial developments, payment systems and digitalisation, as well as strategies for advancing Islamic finance.
A key highlight of the meeting was the signing of the renewal of the Local Currency Bilateral Swap Agreement (LCBSA) by BNM Governor Dato’ Seri Abdul Rasheed Ghaffour and BI Governor Perry Warjiyo.
This renewed agreement allows for the exchange of local currencies between the banks, amounting to RM24bn/IDR 82tn, and will remain in effect for five years. This renewal builds on the initial agreement signed in 2019 and its subsequent extension in 2022.
The LCBSA underscores the continued collaborative efforts in central banking aimed at bolstering the resilience of both countries while facilitating the use of local currencies in trade and investment.
Governor Dato’ Seri Abdul Rasheed Ghaffour, BNM commented: "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."
Governor Perry Warjiyo, BI also shared: "Bank Indonesia believes that the enhancement of LCBSA with BNM represents the importance of international cooperation as part of Bank Indonesia policy mix that support key policies in the area of monetary, macroprudential, and payment system, while contribute to the development of local currency in bilateral transactions.’
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