The Bank of Korea (BOK) and Bank Indonesia signed a memorandum of understanding (MOU) on Tuesday to promote bilateral transactions of local currencies in a bid to facilitate bilateral trade.
The preliminary deal will lay out a framework for the Korean won-Indonesian rupiah transactions for direct investment and others by private banks, according to the BOK.
The deal was signed by BOK Gov. Rhee Chang-yong and his Indonesian counterpart, Perry Warjiyo, on the sidelines of Finance Ministers and Central Bank Governors Meeting of ASEAN, plus its three Northeast Asian dialogue partners -- South Korea, China and Japan -- in Songdo, west of Seoul..
ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam.
The MOU will help companies reduce their transaction costs and exposure to exchange rate risks, among others, by enabling the direct exchange rate quotation between the Korean won and the Indonesian rupiah in interbank trading.
The BOK said more extensive use of local currencies in bilateral transactions will contribute to promoting trade between Indonesia and Korea.
Source: Yonhap News Agency