RBI signs pact with Bank Indonesia

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MUMBAI:

RBI

and

Bank Indonesia

(BI) on Thursday signed a

Memorandum of Understanding

(MoU) to promote use of

local currencies

for bilateral transactions.
The MoU was signed here for establishing a framework to promote the use of local currencies – the

Indian rupee

and the

Indonesian rupiah

– for

cross-border transactions

, RBI said in a statement. This framework would enable exporters and importers to invoice and pay in their respective domestic currencies, which in turn would enable the development of an

INR-IDR foreign exchange market

.

“Use of local currencies would optimise costs and settlement time for transactions,” RBI said. The MoU was signed by RBI governor Shaktikanta Das and Bank Indonesia governor Perry Warjiyo.
“The MoU on establishing a framework for cooperation… aims to promote the use of INR and IDR bilaterally,” RBI said.