Reduce dependence on the US dollar, Indonesia, Malaysia, and Thailand sign local currency trading agreements. Local currency | Indonesia | Thailand
On August 25th local time, during the 10th ASEAN Finance Ministers and Central Bank Governors Meeting held in Jakarta, Indonesia, the Bank of Indonesia signed a memorandum of understanding with the Bank of Malaysia and the Bank of Thailand on local currency transactions to reduce dependence on the US dollar.
It is understood that Indonesia has previously established local currency settlement cooperation with ASEAN member countries Thailand and Malaysia. The newly signed agreement is an expansion of local currency settlement, which means using their respective currencies for trade and direct investment, and companies do not need to use the US dollar as an intermediary.
Perry Vajiyo, the Governor of the Bank of Indonesia, stated that Indonesia and the aforementioned two countries hope to use their currencies for purposes beyond trade and investment. Perry stated that as part of the new memorandum of understanding, Indonesia, Malaysia, and Thailand have agreed to promote more efficient cross-border payments, and the three countries will also use local currencies for financial asset trading, including government bonds and stocks.
According to data from the Indonesian government's statistics department, the bilateral trade volume between Indonesia and Malaysia reached 27.9 billion US dollars in 2022, and the trade volume between Indonesia and Thailand reached 19.2 billion US dollars.