The post Indonesia and South Korea Strengthen Trade with Local Currency Transaction Framework for Rupiah and Won appeared on BitcoinEthereumNews.com.

Bank Indonesia (BI) and South Korea have advanced their economic relationship through a newly established local currency transaction framework. The aim of this framework is to facilitate direct trade between the two nations, utilizing their local currencies, the Indonesian rupiah and the South Korean won, thereby streamlining transactions. Erwin Haryono, head of BI’s department of communication, highlighted that this initiative represents a significant milestone in Indonesia and South Korea’s financial cooperation. This article explores the recent agreement between Bank Indonesia and South Korea, focusing on its implications for bilateral trade and economic relations. New Local Currency Transaction Framework Set for Implementation The agreement between Bank Indonesia and South Korea’s financial authorities heralds a significant shift in how trade transactions will occur between the two countries. Scheduled to take effect on September 30, 2024, this framework is positioned to eliminate reliance on third-party currencies, particularly the U.S. dollar. This move is expected to mitigate exchange rate volatility, thus enhancing trade efficiency and reducing costs associated with currency conversion. Key Features of the Local Currency Transaction Agreement The initiative, first proposed in a memorandum of understanding in May 2023, reflects a strategic partnership aimed at fostering deeper economic ties. As part of this framework, a selection of appointed cross-currency dealer (ACCD) banks from both Indonesia and South Korea will facilitate transactions in their respective currencies. This arrangement is not merely a step towards increased financial autonomy but also a dynamic response to the evolving needs of the global trade environment, which increasingly favors localized solutions. Participating Banks and Their Roles Bank Mandiri, Bank Negara Indonesia (BNI), and several other local financial institutions in Indonesia have been designated as ACCD banks. Their counterparts in South Korea include prominent institutions like Woori Bank and Shinhan Bank. These banks will play a crucial role in…

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Filed under: News - @ September 1, 2024 1:45 am