Bank Indonesia, Hong Kong Monetary Authority and People’s Bank of China sign MoU to promote bilateral transactions in Indonesian Rupiah and offshore Chinese Renminbi between Indonesia and Hong Kong

On Thu, 11 Jun, representatives from Bank Indonesia ("BI"), the Hong Kong Monetary Authority ("HKMA"), and the People’s Bank of China ("PBoC") executed a Memorandum of Understanding ("MoU"). This agreement establishes a cooperation framework aimed at promoting bilateral transactions in Indonesian Rupiah ("IDR") and offshore Chinese Renminbi ("CNH") between Indonesia and Hong Kong.

Operational Framework and Settlement

Under the MoU, a bilateral currency transaction framework will be implemented to facilitate the direct exchange and settlement of IDR and CNH in cross-border trade and investment activities amongst corporates and institutions in Indonesia and Hong Kong. This initiative is designed to enhance the efficiency of cross-border transactions, while promoting greater use of regional currencies.

Implementation and Dealer Appointment

BI and the HKMA will lead the preparatory work for the bilateral currency transaction framework, including the development of comprehensive Operational Guidelines. The two authorities will also identify and appoint selected banks in Indonesia and Hong Kong as Appointed Cross Currency Dealers to participate in the framework. Further details on operational procedures, timelines and participating banks are expected to be announced later this year.

Strategic Significance and Signatories

Mr Eddie Yue, Chief Executive of the HKMA, stated that the signing of this MoU marks an important step in deepening monetary and financial cooperation among the three authorities. He noted that introducing the bilateral currency transaction framework for Hong Kong and Indonesia also marks a major breakthrough in promoting regional currency and Renminbi use, and highlights Hong Kong’s value proposition as the offshore Renminbi hub. The agreement was signed by Mr Pan Gongsheng, Governor of the People’s Bank of China (centre), Mr Perry Warjiyo, Governor of Bank Indonesia (left), and Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (right).