Indonesia and China signed a bilateral currency swap agreement through Bank Indonesia and the People’s Bank of China on March 23, 2009. The value of the swap line equals to USD 15 billion and is in force for three years the possibility of extension on agreement of both countries.
The benefit of this agreement is that the two countries no longer need to the US currency in carrying out their bilateral exports and imports. So far transactions were carried out in rupiah which was converted into the US currency and then to the Yuan. If this cooperation is realized we can have transactions without using the US currency.
Government also asked Chinese Government to open chance for Bank Mandiri to open a branch in China as Indonesian Government has given permits for the opening of branches for two Chinese banks, namely the Bank of China and Industrial and Commercial Bank of China (ICBC).
China Allocates Funding of USD250 Million
The Chinese Government disbursed USD 250 million for trade and investment under a funding agreement between Indonesia Eximbank with the Industrial and Commercial Bank of China (ICBC). The USD 250 million bring the total which had earlier been mentioned by Minister of Trade Mari Elka Pangestu to USD 350 million.
The area of cooperation between the two sides covered trade, investment and finance between Indonesia and China. The form of the cooperation is trade in mechanical products, electronics, technology products, energy and raw materials. It is also in the form of infrastructure projects and energy projects in both countries and are cultivated by Indonesian or Chinese firms.
Apart from that the funding agreement also covered construction projects done by Indonesian or Chinese companies and loans from ICBC to Indonesia Eximbank for projects related to the two institutions. The fund allocation is also provided to support Chinese buyers who want to buy goods from Indonesian exporters, or cooperation on projects between Indonesian and Chinese companies. (dni/jpt/ant)