UAE and Indonesia Sign Currency Agreement to Enhance Trade Relations

UAE, 10 May, 2024 : In a significant move to enhance trade relations, the Central Bank of the United Arab Emirates and Bank Indonesia have signed a Memorandum of Understanding (MoU) promoting the use of local currencies for bilateral transactions.

The agreement, inked by H.E. Khaled Mohamed Balama, Governor of the UAE's Central Bank, and Mr. Perry Warjiyo, Governor of Bank Indonesia, aims to bolster the steady growth of trade between the two nations. Non-oil trade between the UAE and Indonesia has doubled between 2017 and 2023, exceeding AED 16 billion.

The MoU establishes a framework facilitating cross-border trade settlements in the UAE Dirham and the Indonesian Rupiah. It delineates eligible transaction types and lays the groundwork for supporting hedging and liquidity management activities in AED-IDR, ultimately reducing transaction processing costs for businesses.

Governor Balama expressed optimism about the agreement, stating that it provides a strong foundation for future partnerships, fostering more business opportunities in the banking and financial sector while supporting trade and investment growth.

Governor Warjiyo highlighted the importance of the cooperation in deepening financial integration and strengthening economic ties between the UAE and Indonesia. He emphasized that local currency transactions would bolster financial stability and resilience, deepening financial markets to address external vulnerabilities.

Under the agreement, the Central Bank of the UAE and Bank Indonesia will collaborate on gradually implementing the framework, with a focus on developing financial markets to support economic growth and stability.

Source : www.centralbank.ae