Bank Indonesia, Bank Negara Malaysia Agree to Renew Bilateral Swap Agreement
Indonesian central bank Bank Indonesia (BI) and Bank Negara Malaysia have agreed to renew the local currency bilateral swap arrangement (LCBSA) of up to RM8 billion or Rp28 trillion on September 23, 2022.
The LCBSA renewal is expected to strengthen financial cooperation between the two central banks.
“Bank Indonesia believes that the LCBSA renewal will strengthen financial cooperation between Bank Indonesia and Bank Negara Malaysia and is expected to further increase market confidence in the economic fundamentals of the two countries,” said Governor of BI Perry Warjiyo, in a written statement as quoted from the BI’s website, Wednesday (09/28).
This agreement is effective for three years and is a renewal of the agreement that was first agreed in 2019.
“The renewal of the agreement also demonstrates a shared commitment to strengthen financial market stability through the wider use of local currencies for bilateral transactions between Indonesia and Malaysia,” said Perry.
Similarly, Governor of Bank Negara Malaysia Tan Sri Nor Shamsiah Mohd Yunus also welcomed the renewal of the LCBSA agreement.
“Considering the significant development of trade flows between Malaysia and Indonesia, we welcome the continued cooperation with Bank Indonesia through the renewal of the LCBSA agreement. This LCBSA collaboration also complements the financial cooperation that the two central banks have had and aimed at encouraging the use of local currencies in trade and investment activities between the two countries,” said Tan Sri. (BI/UN PR) (EST/MMB)