Indonesia, Australia Renew Bilateral Swap Arrangement

Image Source: PR of Bank Indonesia

Central bank Bank Indonesia and Australia’s central bank Reserve Bank of Australia have renewed the Bilateral Currency Swap Arrangement (​​BCSA).

“The agreement will apply for three years and may be extended upon the agreement of the two central banks,” Bank Indonesia announced on its official website, Monday (02/21).

For the record, the initial swap agreement between the two central banks was signed in 2015 and has been renewed for a three-year period.

As with the previous agreement, the renewal allows for the exchange of local currencies between the two central banks of up to A$10 billion or Rp100 trillion.

The agreement was aimed at promoting bilateral trade for the economic development of Australia and Indonesia.

In particular, the agreement will also ensure that trade between the two countries can continue to be settled in local currency.

Apart from Australia, Bank Indonesia is also conducting financial cooperation with other central banks in several countries in the region, including China, South Korea and Malaysia.

The BCSA renewal agreement was signed by BI Governor Perry Warjiyo and Governor of Reserve Bank of Australia Philip Lowe.

The renewal of the agreement, which came into force on February 18 this year, also reflects the ongoing strengthening of cooperation between the two countries’ central banks.

The BCSA is a form of bilateral financial cooperation commonly carried out by central banks. The agreement allows a central bank to obtain foreign currency from partner central banks by exchanging the local currency of each country, to be exchanged again at the agreed maturity date. (PR of Bank Indonesia/UN) (RI/EP)