On 27 September 2024, Bank Negara Malaysia (BNM) and Bank Indonesia (BI) held a high-level bilateral meeting in Jakarta, Indonesia.
The two central banks exchanged information, experiences and discussed comprehensive policies including financial, monetary and macroeconomic developments, payment systems and digitalization as well as strategies to promote Islamic finance.
The close engagements reflect the long-standing cooperation between the two central banks and a strong commitment to further enhance mutually beneficial cooperation between the two countries.
At the meeting, BNM Governor Abdul Rasheed Ghaffour and BI Governor Perry Warjiyo signed the extension of the Local Currency Bilateral Swap Arrangement (LCBSA). The LCBSA allows for local currency swaps between the two central banks, with a value of up to MYR 24 billion (USD 5.8 billion) / IDR 82 trillion (USD 5.4 billion), for a period of 5 years. This follows an initial agreement signed in 2019 and subsequent extension in 2022. The LCBSA reflects the continued efforts of central bank cooperation to enhance the resilience of both countries, while supporting the use of local currencies in trade and investment.
Governor Ghaffour said: “With the deepening trade and financial linkages between Malaysia and Indonesia, we are pleased to continue our collaboration with Bank Indonesia with the extension of the LCBSA. The LCBSA complements the Local Currency Settlement Framework (LCSF) between the two countries, which is a key factor in promoting local currency trade and investment settlement.”
“Bank Indonesia believes that the strengthening of the LCBSA with Bank Malaysia demonstrates the importance of international cooperation as part of Bank Indonesia’s coordinated policy to support key policies in the areas of monetary, macroprudential and payment systems, while contributing to the development of the local currency in bilateral transactions,” said Governor Warjiyo.