PBOC, BI, and HKMA sign MoU to promote direct yuan-rupiah bilateral trade

The People's Bank of China, Bank Indonesia, and the Hong Kong Monetary Authority signed a memorandum of understanding on Thursday to establish a cooperative framework to facilitate the use of the rupiah and offshore yuan in bilateral transactions between Indonesia and Hong Kong. 

The framework will establish a bilateral currency transaction mechanism, making it easier for Indonesian and Hong Kong-based corporates and institutions to directly exchange and settle cross-border trade and investment in rupiah and offshore yuan, thereby enhancing cross-border transaction efficiency and promoting broader use of regional currencies.

Bank Indonesia and the HKMA will lead the preparatory work for the bilateral currency transaction framework, including developing comprehensive operational guidelines. Both authorities will also identify and appoint selected banks in Indonesia and Hong Kong as Appointed Cross Currency Dealers to participate in the framework. Details regarding the operational procedures, specific timeline, and participating banks are expected to be announced later this year.

Eddie Yuen, chief executive of the HKMA, said the MoU marks an important step for the three central banks in deepening monetary and financial cooperation, adding that the establishment of a bilateral currency transaction framework between Hong Kong and Indonesia is a major breakthrough in promoting the use of regional currencies and the yuan, highlighting Hong Kong's unique advantages as an offshore yuan hub.
 

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