Indonesia, Korea unveil operational guidelines for local currency transactions

This is part of the two countries’ agreement to promote bilateral transactions in local currency.

Bank of Indonesia (BI) and Bank of Korea (BOK) have established operational guidelines for local currency transactions.

This follows the two central banks’ signing a memorandum of understanding (MOU) to establish a cooperation framework for the promotion of bilateral transactions in local currency between the two. The MOU was inked in May 2023.

The framework, scheduled to be operationalized in 2024, is expected to facilitate the settlement of trade transactions between Indonesia and Korea in their local currencies.

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With this, banks in Indonesia and South Korea will be able to quote the local currency pair, enabling businesses and other users to reduce their exposure to exchange rate risks and costs associated with bilateral transactions. 

This, in turn, is expected to promote trade between both countries, and deepen their financial markets in local currencies.