BI issues export-import regulation using baht, ringgit

BI issues export-import regulation using baht, ringgit

Ilustration. Rupiah and Ringgit, two currencies used by communities in the Indonesia-Malaysia border region on Sebatik Island to transact in the market and in stores that have been going on for decades. (ANTARA PHOTO/M Rusman)

Jakarta (ANTARA News) - The central bank of the Republic of Indonesia, Bank Indonesia (BI), has issued technical regulations to settle trade transactions between Indonesia and Malaysia using Ringgit, as well as between Indonesia and Thailand using Baht, in order to reduce dependence on certain currencies and maintain exchange rate stability.

The regulation is the Governor Board Regulation on Local Currency Settlement (LCS), BI`s Executive Director of the Communication Department Agusman said here on Monday.

"Transaction using local currencies can encourage bilateral trade between Indonesia and Thailand, as well as Indonesia and Malaysia and also reduce dependence on certain currencies so as to support the stability of the exchange rate," Agusman explained.

Bilateral trade without using US dollar will be conducted through commercial banks designated as intermediaries called Bank Appointed Cross Currency Dealer (ACCD Bank).

BI and the authorities in Malaysia and Thailand will assign AACD Banks. The authorized AACD Banks will gain flexibility in performing certain financial transactions and activities in foreign exchange markets.

According to Agusman, those activities and financial transactions include the opening of Baht and Ringgit currency accounts, direct quotes for Baht and Ringgit currencies to Rupiah, and trade financing in Baht and Ringgit currencies.

"This financial provision will be effective from Jan 2, 2018," he stated.

Meanwhile, technical regulations concerning the settlement of bilateral transactions between Indonesia and Thailand are contained in the Governor Board Member Regulations on the Settlement of Bilateral Trade Transactions between Indonesia and Thailand Using Rupiah and Baht through Banks.

(T.SYS/B/KR-BSR/F001)

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