Indonesia, Malaysia, Thailand Agree on Reducing Dependence on Dollar

(From left) BoT governor Veerathai Santiprabhob, BI governor Agus Martowardojo and Bank Negara governor Datuk Muhammad Ibrahim posing after the signing of the two bilateral MoUs..

Jakarta, 24 Rabiul Awwal 1438/24 Desember 2016 (MINA) – Central banks of Indonesia, Malaysia, and Thailand have signed a memorandum of understanding on trade settlement and direct investments using local currencies to reduce dependence on the US dollar.

“In the long term, the cooperation agreement will be positive for trade and investment in Southeast Asia. This is also done in the framework of reducing dependence on the US dollar,” Antara quoted Bank Indonesia (BI) Deputy Senior Governor Mirza Adityaswara as saying here on Friday.

The agreement was signed in Bangkok, Thailand, by BI Governor Agus Martowardojo, Governor of Bank Negara Malaysia Muhammad bin Ibrahim, and Governor of Bank of Thailand (BoT) Veerathai Santiprabhob.

The agreement will give more options to business players in choosing the currencies they wish to use during transactions, Tirta Segara, BI Executive Director Department of Communication, said.

So, the use of local currencies in the Association of Southeast Asian Nations (ASEAN_ may increase, thus reducing risks in the midst of global financial market volatility, he said.

“This will benefit business players in that it will reduce transaction cost and increase trade efficiency and investment,” he said.

The agreement will also spur the development of the regional financial market to support financial and economic integration, Tirta said.

“This will be a milestone in the regional central banks cooperation,” he said.

To reduce dependence on the US dollar, Indonesia had earlier established bilateral currency swap agreements with several countries including China and Australia.(T/RS05/RS01)

Mi’raj Islamic News Agency (MINA)