Indonesia, UAE team up to promote local currency use in bilateral transactions

UAE and Indonesia's non-oil trade grew to $3.1b between 2017 and 2023.

Indonesia and the United Arab Emirates have inked a memorandum of understanding (MOU) to establish a framework promoting the use of local currencies in bilateral transactions.

The partnership comes at the back of the UAE and Indonesia witnessing its non-oil trade grow to IDR50t ($3.1b) between 2017 and 2023.

Bank Indonesia Governor Perry Warjiyo and UAE central bank governor H.E. Khaled Mohamed Balama signed the MOU.

Under this agreement, the central banks of UAE and Indonesia will collaborate on promoting the use of their national currencies by supporting the gradual implementation of the framework, which also aims to develop financial markets to support economic growth and financial stability.

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The framework will consist of measures aimed at facilitating the settlement of cross-border trade transactions in the UAE Dirham and Indonesian Rupiah as agreed between importers and exporters. 

It also outlines the types of eligible transactions, and the conditions to support hedging and liquidity management activities in AED-IDR. 

(IDR1 = US$0.000062; as of 13 May 2024, 2:52 PM)