The Reserve Bank of India (RBI) and the Bank Indonesia (BI) signed an agreement Thursday to promote the usage of local currencies in bilateral transactions between the two countries. The agreement aims to establish a framework for cooperation in the area of cross-border transactions in local currencies.
The MoU will cover all current and permissible capital account transactions as well as other economic and financial transactions agreed upon by both nations.
The use of local currencies in bilateral transactions is expected to boost trade and financial integration between India and Indonesia.
The agreement marks a significant milestone in the strengthening of bilateral cooperation between RBI and BI. It is hoped that this will eventually contribute to the promotion of trade and financial integration between India and Indonesia.
The Reserve Bank of India (RBI) has been actively promoting the internationalisation of the rupee. In 2022, the RBI introduced a scheme for international trade settlement in rupees. The RBI’s decision to allow invoicing and payments for international trade in Indian rupees has also contributed to the growth of international trade.
Much depends on the trade balance between the two countries