JAKARTA – The renewal of the Local Currency Bilateral Swap Agreement (LCBSA) between Malaysia and Indonesia enables the exchange of local currencies between Bank Negara Malaysia (BNM) and Bank Indonesia (BI) with a value amounting to RM24 billion or IDR82 trillion for five years.
Both central banks inked the renewal of the LCBSA here yesterday, following the initial agreement signed in 2019 and the subsequent renewal in 2022.
In a joint statement, the central banks said the LCBSA reflects central banking cooperation to strengthen both countries’ resilience while also supporting the use of local currencies in trade and investments.
BNM governor Datuk Seri Abdul Rasheed Ghaffour said: “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.”
He stressed that the agreement complements the Local Currency Settlement Framework (LCSF), which remains a key enabler for trade and investment settlements in local currencies.
“BI believes that the enhancement of LCBSA with BNM represents the importance of international cooperation as part of BI policy mix that supports key policies in the area of monetary, macroprudential, and payment system while contributing to the development of local currency in bilateral transactions,” BI governor Perry Warjiyo added.
BNM held a high-level bilateral meeting with BI where they exchanged information and experiences and had a comprehensive policy discussion encompassing macroeconomic, monetary, and financial development, payment systems and digitalisation, and strategies for advancing Islamic finance.
The close engagements reflect the long-standing cooperation between the central banks and strong commitment to further strengthen mutually beneficial collaboration between both countries. – September 28, 2024